You might have considered taking out a loan but you’re worried that your credit score is not looking too good. Well there are two options out there for you. Online lenders are offering so called ‘Payday Loans’ as well as ‘Loans for People with Poor credit‘.
So what is the difference between the two? The difference is that payday loans are usually not given out in excess of $1k while loans for people with poor credit can be given out in higher sums. Both methods of borrowing money are similar in so far that the lenders are usually not looking for a particular credit score. Instead they are looking at how much money you make every month and whether you can afford the loan or not (some payday loans might, however, still need a credit score).
Both kinds of loans also have the added advantage in comparison to banks that their approval (or denial) processes are much faster as they are pretty much automated online.
Before you decide for which kind of loan you are going for, you first need to determine how much money you actually need to borrow. While it might seem very tempting to just borrow as much as you can so that you have some spare reserves, you should keep in mind that you need to pay interest on everything that you are borrowing. This means that the more you borrow the more you have to repay. So if you borrow too much your salary in the next month might be reduced to pretty much nothing, putting you back into the position that you are having to borrow more money again. This could lead to a vicious cycle were you are having to borrow more and more money with more and more interest adding up.