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Payday Loan for People with Low Credit Score: Hope or Nightmare?

There always be a pro-contra on payday loan. The largest pro-contra on payday loan is due to the premise that payday loan is purposed to help people getting small amount of cash, usually $100 to $500, quick.

Typically, the ones who need payday loans are those that need cash quick and low credit score.

What is a payday loan or payday cash advance? Payday loan is a form of cash advance , where borrower receive a short-term loan, which amount is usually between $100 to $500, and payable within under 1 month period, until payday.

The psychology of payday loan

Most people always have a certain needs that are related to money, such as covering daily expense. This fact, along with the fact that most payday loan taker is low income person, have made payday loan a viable option.

The psychology is simple – a pressing need requires an immediate gratification. This is where payday loan comes into play.

Unfortunately, many slump into bad debts simply because they don’t understand about payday loan, or they don’t have the right reason to take payday loan.

The pros of payday loan

Most payday loan providers offer fast approvals and open for low credit score applicant.

Online payday loan provider, such as Payday One – a US-based and state licensed payday loans provider – offer 24/7 access to payday information and application.

The cons of payday loan

The high interest rate is the main drawback of payday loan. The interest rate is approximately 400% APR, which means a $100 loan should be repaid $115 within 2 weeks.

Moreover, if you are not careful in managing your payday loans, you can easily get trapped in a vicious cycle of borrowing money to cover other loans. This is what often happens, and give payday loans negative reputation.

Payday loan: a hope or a nightmare?

The pitfall is not on the payday loan – the concept of payday loan itself is plausible and actually purposed to help people with financial difficulties.

It is the borrower financial knowledge and mindset that determine whether payday loan is a hope or a nightmare. No matter your credit scores – it is your vision of what to be made of payday loans that will actually allow you the make payday loans as a financial leverage.