How Payday Loans for Bad Credit Work

A Payday Loan is designed to provide you with extra cash to hold you over until your next payday. These loans are also a viable option for people with all types of credit, including bad credit. Unlike other loans, Payday Loans don't solely rely on your credit score; they also consider factors like your income and current employment. 

Payday Loans also have other benefits. You typically get the loan funds quickly and can use the money to cover an emergency expense, like a car repair or medical bill, or simply paying for everyday essentials when money is tight. 

If you're considering a Payday Loan for bad credit, here's how they work and how to apply for one online.

How do Payday Loans for bad credit work? 

The amount you can borrow from a Payday Loan is typically based on a portion of your expected paycheck – usually a couple hundred dollars or less. You then use the money for what you need and repay the loan in full on your next payday, which is usually within two to four weeks.

Many payday lenders have less strict credit score requirements than banks and credit unions, so they rely on factors like your income and employment history when making their approval decision.  

Payday Loans also offer quick funding, making them a great option when you need cash fast. Even if you have less-than-perfect credit, you can apply for an Advance America Payday Loan online and, if approved, get your money by the following business day. 

At Advance America, we offer same-day funding for applications approved before 10:30 AM EST. 

Before you start the loan application process, make sure you have the following information on hand:

• Social Security number
• Email address
• Checking account information
• Proof of income 

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Online Payday Loans for bad credit 

Direct lenders like Advance America may offer Payday Loans for bad credit online in addition to their storefront locations. Simply fill out the short application form online, review your approval decision and, if approved, wait for the funds to be deposited directly to your checking account.

Whether you apply online or in person, you can get the same amount of money and receive it via direct deposit just as quickly. 

How much does a Payday Loan for bad credit cost? 

Rates vary by state, but you’ll typically pay about $15 to $20 fee for every $100 you borrow. The state you live in will also determine the amount you can borrow. Remember, you’re responsible for any interest or fees associated with late or missed payments, so borrow responsibly. 

Even though a Payday Loan does cost money, it can be a more affordable alternative to overdraft charges, credit card late fees, and bounced checks, especially when you know you can repay the loan as scheduled. 

Benefits of a Payday Loan for bad credit

Easy application. Payday Loans often come with easy applications that borrowers can complete online or in-store. In fact, you may be able to apply in just a few minutes from the comfort of home. 

Quick approval. Once you apply for a Payday Loan, you should receive an instant or quick approval decision. Funding times vary by lender. 

Good credit not needed. Bad credit, good credit, or no credit history at all; it doesn’t matter when you apply for a Payday Loan. Instead, payday lenders consider your ability to repay the loan on your next payday, which means looking at your anticipated income and employment history. This means you may still get approved even if you have bad credit. 

Other loan options if you have bad credit 

While Payday Loans for bad credit can be a good option for many borrowers, they may not be right for everyone. If you need and advance of cash but don’t want to pursue a Payday Loan, consider these alternatives: 

Installment Loan 

Installment Loans for bad credit give you a lump sum of money upfront. You’ll pay the loan back over time (anywhere from a few months to several years) via fixed monthly payments, or installments. These loans might make sense if you need a lot of cash at once. 

Car Title loan 

Car title loans for bad credit are secured loans that use your car as collateral. Upon approval, you’ll give the lender your title in exchange for a lump sum of cash, based on the value of your vehicle. You’ll be able to drive your car as you repay your loan. If you own your car and are willing to use your title as collateral, a title loan through our partnership with LoanCenter might make sense. 

Personal Line of Credit 

With a personal Line of Credit, you can withdraw money whenever you’d like up to a set credit limit, and you’ll only pay interest on the amount you borrow. A Line of Credit should be on your radar if you’d like a flexible loan but aren’t sure exactly how much you need to borrow right now. 

Tips to improve your credit 

The better your credit is, the more favorable your loan rates and terms might be. Therefore, it’s always a good idea to improve your credit as much as possible. If you’re not sure where you stand, visit AnnualCreditReport.com to check your credit report, then follow these tips: 

Pay your bills on time. Even one late payment can ding your credit. Focus on paying all your bills on time, including your mortgage, utilities, auto loans, and credit cards. 

If you struggle to remember your payment dates, enroll in automatic payments or set calendar reminders on your phone so you don’t forget and miss a payment. 

Keep your credit accounts open. Your length of credit history has a direct effect on your credit score. Generally, the longer you’ve had your credit accounts open and in good standing, the higher your score. 

If you can, try to keep your old accounts open, even if you want to avoid using them or have a zero balance. 

Reduce your credit utilization ratio. The amount of debt you have divided by the amount of credit available to you is known as your credit utilization ratio. Since most lenders prefer a ratio of less than 30%, it’s important to reduce your ratio by paying down your balances. 

Get an Advance America loan today 

Whether you need a Payday Loan, an Installment Loan, or a Line of Credit, you can apply for one with Advance America. Regardless of which loan you choose, we offer affordable interest rates, a fast turnaround time, and no hidden fees. And best of all? You don’t need great credit to qualify. 

Ready to apply? Let’s get started!