Quick cash loans for bad credit are also commonly referred to as payday loans
. These are small and short-term unsecured loans. These kinds of loans do not consider if an individual has the loan repayments to their payday. Laws regarding the quick cash loans vary from country to country.
To ensure excessive interest rates are not charged on the quick cash loans, some jurisdictions are put in place. Some limit the total annual percentage which a lender could impose on a borrower. In the United States of America, Uniform Small Law Loans (USLL) is the body which ensures lenders keep their interest rates between thirty-six percent and forty percent. Even though the lender may face some risks, studies confirmed by the United States Securities and Exchange Commission have proved that the lender does not face the risk of long term.
Payday lending process
The lender gives unsecured loan which is expected to be paid on the borrower’s following payday. Verification of the borrower’s payment history and income is made. During this crucial process, bank statements and stubs come in handy. Some lenders, however, fail to make verification on the borrowers employment history and their income.
Traditionally, borrowers had to visit a quick cash loan store to secure their money. The payment was expected to be made immediately on the following day’s borrower’s payday. The borrower had to write a post-dated cheque to the lender plus the fees to be charged. To repay the loan, the borrower had to return to the store personally. Failure to do so will make the lender redeem the cheque. In cases when the borrower’s account balance is insufficient to secure the cheque, the borrower faces bounced cheque from their bank in addition to the loan amount. The borrower ends up in a loss as the interest rates may go up.
bad credit quick cash loans
Thanks to advancement in technology, the quick cash loans are now offered online. Credit transactions are done online including filling in of forms and the documentation process. Funds are transferred into borrower’s account via direct deposits. Loan repayments are electronically withdrawn from the borrower’s next payday.
Reasons an individual may opt for quick loan cash
According to recent studies done in the United States of America, most borrowers are white females between the ages of twenty-five and forty-four years old. Taking a keen and closer look at the list, most of the borrowers fall into five broad categories. Namely, those who do not have four-year university education, African-Americans, home renters and those who earn below forty thousand US dollars per year.
Black and Hispanic people, immigrants and single mothers are also very likely to opt for the quick cash loan. The loans borrowed are usually likely to cover for the day to day living expenses and other unexpected emergencies.
Both the borrower and the lender have numerous advantages in the quick cash loans. To begin with, the industries involved gain a lot of profits. According to recent studies, the average profit margins for quick cash lending companies is 7.63%.
The charges of quick cash bad credit payday loans are also in line with the costs. These benefits seem to attract investors into the quick cash loan industry. This could as well be the reason why lenders to do not put in so much efforts to acquire sufficient information about the borrower’s employment history and other crucial details.
The quick cash loan market is famously known to provide services which would have otherwise been unavailable. Services such as providing small amounts and offering investment services to poor households would have been unavailable had it not been for quick cash loans.