Borrowers with good to excellent credit (690 and up) have the largest choice of buying payday loans. Lenders consider borrowers with medium or bad credit as higher risks, and some may not offer loans accordingly. But a bad credit rating does not mean that you can not get a payday loan.
The three main options for getting a payday loan are:
- Online Lenders: These lenders offer a convenient way to search and compare payday loans.
- Credit Unions: A local credit union can offer payday loans with lower interest rates and more flexible terms than loans from other lenders.
- Banks: Some major banks and financial institutions offer payday loans, including Wells Fargo and Citibank.
Payday loans from online lenders
Most online lenders quote rates and conditions during a pre-qualification process after a flexible credit check. It’s just an investigation and it does not hurt your credit; A credit check is a real demand for credit that can briefly boost your credit score.
Due to the competitiveness of the payday loan market, online lenders are more likely to distinguish themselves from traditional lenders, either by applying lending guidelines that go beyond traditional credit rating models, or by offering extras such as flexible payments, no fees or ways to reduce your refund rate.
Some online lenders cater to hard credit borrowers, offering high loan amounts and low interest rates. The credit ratings from 690 to 719 are considered good, while those of 720 and above are excellent.
Other lenders cater to borrowers with average or less credit credit. The rates are higher, but a lender can take into account factors other than your average credit rating (630 to 689) or bad (300 to 629).
“PLUS: Better interest rates on payday loans
Borrowers with bad credit may consider:
- An online lender for borrowers with bad credit. Some consider non-traditional factors as the potential for gain in their underwriting decisions.
- A secured payday loan. You will need collateral such as a car or a certificate of deposit.
- A loan from a co-signer. A friend or family member with good credit can help you qualify for a loan or a lower interest rate. The co-signer is responsible for paying the loan if you do not do it.
payday loans with credit unions
Credit unions are often willing to work with borrowers who have good or bad credit. These non-profit financial institutions serve people who live, study, work or pray in a particular area. To apply for a loan, you must first become a member.
If you are looking for a small payday loan, a credit union should be your first stop.
If you are looking for a small payday loan – less than € 2,500 -, a credit union should be your first stop. Some lenders do not offer such loans.
Marine Federal and First Tech Federal are two credit unions that offer payday loans.
payday loans from banks
You will probably need good credit to qualify for a payday loan from a bank. If you are already a customer of a bank, you could benefit from benefits such as the application without visit to a branch or the granting of a loan of a higher amount.
Some large banks offer free credit scores or no origination loans.
Major banks that provide payday loans include:
- Citibank: loans mainly to prime borrowers and limits amount to 12,500 euros for new customers.
- Discover: focuses on debt consolidation loans and provides free FICO scores, whether you are an existing client or not.
- Marcus: Goldman Sachs online lender who does not charge any fees and gives borrowers the ability to avoid payment after 12 months of payment on time.
- Wells Fargo: Allows borrowers to send money directly to creditors for debt consolidation.
“PLUS: Leading banks offering payday loans
Some of the best-known national banks, such as Bank of America and Chase, do not offer unsecured payday loans. They offer other credit products, such as mortgages, home equity lines of credit and credit cards.
A local community bank can offer payday loans. Existing customers in good standing with the bank have the best chance of getting the lowest rates.
How to choose a lender
When shopping for a payday loan, be sure to look at the annual percentage rate, not just the interest rate or the monthly payment. The APR includes the interest rate and any additional fees you will have to pay. This is the best comparison between two loans.
Shop for rates, but do not just shop around for fares.
Shop for rates, but do not just shop around for fares. Determine which lender offers the user-friendly features you may need. For example, with some debt consolidation loans, lenders will send money directly to creditors, eliminating this step for you. Other lenders may let you choose a payment due date or forgive occasional late fees.
A difference of half a point of interest on a payday loan of € 5,000 over five years will cost about one euro more per month. However, the ability to reprogram a payment may prevent you from missing a payment and being charged late fees and a negative impact on your credit score.
Some lenders may only grant loans for specific purposes. Payoff, for example, only looks for customers who want to consolidate their credit card debt. Some credit unions will only make large loans if they are residential improvements. But the majority of lenders do not care what you do with this money.