Are you looking for online cash loans for bad credit? The chances are that you have already tried at the banks for a conventional loan but have had your application rejected every time. If you have bad or no credit, it might be especially challenging for you to find the correct form of financing when sudden financial emergencies arise. That is when you need to look for other possible options and explore alternative avenues to find the help you need. Here at LendingSumo, we specialize in online cash loans for people with bad credit. Is that something you need or want?
Online cash loans for bad credit – common perceptions and options
When you think of cash loans bad credit, you might automatically imagine cash advance loans. While that may hold true in certain cases, it is only partially correct. Lenders often use the words “cash advance” loosely for a range of financial products. You might see them use it alongside buzzwords such as “no credit checks,” “fast cash,” and “payday loans.” Also, due to the growing popularity and demand for online cash loans, more and more lenders are providing the same, and they are using various tactics to promote their offerings. Understanding what it really means is crucial to getting the right bad credit loans.
Now, as mentioned above, a cash advance may refer to a range of loan products. Typically, it means a quick injection of money. However, critical aspects such as loan amount, interest rate, loan term and so on may vary depending on the particular financial products. That is why it is important to note that the various cash advance online loans may be vastly different from each other. Such loans may not have any similarity other than their names. So, when selecting a “cash advance” loan, you need to be careful about which loan you are going for. Here are some of the common types that you will come across.
Cash advance loans:
As mentioned above, both storefront and online lenders use the term cash advance heavily to describe a bunch of their offerings. They may not explicitly add the word “loan,” but that is what they are providing. In most cases, a cash advance loan may simply be a payday loan dressed differently. The reason we say this is because both the loans work the same way. To avail of such a loan, you need to go to the lender and write them a check for your next payday. You would also have to mention the combination of the loan amount, interest rate and other charges as the amount on the check.
Once you fulfill the formalities, the lender will give you the money in cash or transfer the sum directly to your bank account. Now, this money is yours and you can spend it however you want on anything you like. What about repayment of the loan? The lender will cash the check you provided the day you get your paycheck and use the sum as payment for the loan, interest and other associated fees.
There is a lot of talk about whether or not cash advance loans are safe. In theory, these loans provide you with instant funding especially when traditional lending institutions such as banks have closed their doors to you. While that is true, you should also remember that cash advance loans often come with exorbitant interest rates. The interest rates and the other charges may increase the total payable amount significantly. On the other hand, these loans typically have a short tenure of about 2 weeks. You need to repay the loan in one lump sum. You might even need to spend your entire paycheck on servicing the loan!
Based on the core nature of cash advance loans, it is safe to say that these loans are great when you need quick cash for an emergency. However, the short tenure and the high rates of interest make it a fairly risky option. It would be smart to explore other options before you settle for this loan.
Credit card cash advance:
These loans are offered by credit card companies. As the name suggests, you can borrow money against your credit card, and you need to repay the sum with interest and other charges. To avail of a credit card cash advance loan, you may visit the nearest branch of the bank or go to an ATM to withdraw the money. The amount that you will withdraw will then be added to your credit card bill just as it would if you used your card to pay for something. However, unlike a debit card, the credit card does not take money out of your bank account. You get it as a loan from your credit card company. That means you are fully responsible for paying it back.
Delaying payment on your credit card loan may end up causing problems because the longer you take, the more interest the loan will accrue. You will also receive no grace period. The loan starts accumulating interest right away. Credit card cash advance tends to be much more expensive than paying for expenses with your card. The interest rate on these loans is usually about 20% higher than regular credit card interest rates. Then there are fees that you need to include in the total amount that you need to repay. The fees usually range from 2% to 5% of the money you withdraw as the loan.
Credit card cash advance loans may be highly useful for taking care of expenses such as rent. Since you cannot pay rent through credit card, taking out a loan against your card makes sense if you are running low on funds. However, the issue lies in the exorbitant interest rates and fees that are part and parcel of these types of loans. On the other hand, you will only be able to borrow as much as your credit card limit will allow. If there is an existing balance on your card, that amount may get reduced.
Employer cash advance:
Unlike a credit cash advance or a cash advance loan, the employer cash advance is not a loan. The money is yours and it will be deducted from your next paycheck. Not employers provide employer cash advance and those who do usually have some stringent policies about how many times you can avail of this facility. So, before planning to get an employer cash advance, you need to talk to your H.R. manager or co-workers. Asking your supervisor or employer directly may be awkward. If you find that your employer offers this facility, you would need to apply for one.
Some companies follow a formal process for this type of cash advance, whereas others require you to speak with your supervisor privately. Whatever the case may be, you should approach the matter cautiously and tactfully. You need to pick the right time for it. Do not just blurt out you need a cash advance on a busy day. Doing so may invite a lot of questions about why you need it so urgently and an argument may follow. You do not want to create trouble and eliminate the possibility of getting the money.
If your employer agrees to give you the cash advance, you may have to go through some paperwork. This a formal way of getting the arrangement in writing, and it would also let you know details such as when the money will be taken out of your paycheck. Read the documents carefully so as to avoid confusion later on.
An employer cash advance can offer you quick relief from a cash crunch. It is also a good arrangement because it does not include any interest. However, as mentioned above, your company may not have his policy in place. Even if they do, they might not be willing to give you the money unless it is a dire emergency. You should also take into account the fact that your next paycheck will have significantly less money. It might create budgeting problems for the next month.
Online lenders vs. banks – how are they different?
When looking for cash loans for bad credit, you might have to rely on alternative lenders. However, it might be a little scary if you have never borrowed from an online lending platform before. You may even wonder how online lenders and banks are different. Here are a few points that should clear out some of your confusion.
Everyone knows banks have stringent lending policies and eligibility criteria in place. If you have been dealing with dealing with poor credit for some time, you should know how difficult it is to qualify for a standard loan from the banks. That is because banks want to lend to the more credible and responsible borrowers. Ever since the financial crisis of 2008, banks have tightened their policies in order to prevent losses. That is why there are fewer chances of you getting a bad credit loan from the traditional lenders.
Online lending platforms such as LendingSumo, on the other hand, actively serve people with bad credit ratings. If you are in a desperate need for money, alternative lenders may be your only source for getting some quick cash. Because these lenders already know that you are dealing with low credit score, they have much more relaxed eligibility criteria. Some of these lenders may also provide cash loans no credit check schemes. Here, they carry out a soft credit inquiry as opposed to a hard one. This allows them to assess your creditworthiness without damaging your scores further.
Though banks have strict qualifying criteria, the good thing is that they offer loans at decent interest rates. Since traditional loans are often exclusive to borrowers with good credit scores, banks are more confident in their repayment capabilities. That is why they are more inclined to provide the money at more favorable rates and repayment terms.
Alternative lenders, on the other hand, often impose steep interest rates for their bad credit loans. The reason is simple; they want to secure their own interests by charging extra. Since your credit history does not show your impeccable debt management skills, they need to cover their losses in the event of a missed payment. You may get to reduce the interest rates by going for secured bad credit loans. However, putting your assets on the line may not be the smartest move.
As you might already know, banks typically provide loans with higher credit maximums than alternative lenders. Credit maximum refers to the credit limit or the amount of money the lender is willing to offer you through a line of credit. Most bad credit loans, on the other hand, may come with lower sums of money. However, you might be able to find online lending platforms that can arrange as much as $5000 in cash advance loans.
Why choose LendingSumo for online cash loans for bad credit?
When looking for bad credit loans online, you might find a ton of options. Most providers will claim to provide you with high sums at incredibly low rates. When facing a tough financial situation, you might feel like that is the best option you can find. However, you should take such tall claims with a pinch of salt. The alternative lending sector is fraught with predatory lenders. It is easy to fall into a debt trap with such lenders. If you want a safe and reliable platform, LendingSumo would be your best choice.
We have transparent lending policies that seek to give you all the details about a loan product before closing a deal. We also work with established direct lenders to offer you the best rates possible. Unlike many lenders that involve third parties and brokers, we work exclusively with trusted direct lenders. We personally vet our lenders to ensure that they have fair practices and lending policies in place. With us, you have the assurance of high-quality bad credit loans at competitive interest rates.