What You Should Know About Payday Loans

If you have no credit or poor credit and find yourself in need of money, you may be tempted to turn to payday loans and lenders. But did you know that World offers the best personal loans for bad credit? While it may seem like there is a payday lender in every strip mall you pass, they’re not your only option. A personal loan is the best option if you want to improve your credit score and financial situation. Let’s dig in and find out why.

What is a payday loan?

Payday loans are small, high-interest loans issued by payday lenders. Typically, payday loans are used to get cash fast without a credit check. The lender offers a small loan for an additional fee, and the borrower writes a post-dated check for the lender to cash on their next payday.

While payday loans may use clever marketing to position themselves as easy and consumer-friendly, the fine print reveals they do not always have a borrower’s best interest in mind. In fact, payday lending is prohibited or restricted in a growing number of states due to the potential risks they pose to consumers. If you are considering borrowing money from a payday lender, these are some risks you’ll need to be aware of:

You’ll pay high interest rates & fees.

The average annual-percentage rate (APR) for a two-week payday loan can run between 390% and 780%. That’s not a typo! Payday lenders also charge high fees to borrow money, sometimes as much as $15 to $30 on every $100 borrowed.

Expect short repayment fees and high penalties.

Payday loan repayment is typically expected 30 days after opening the loan, which means your next paycheck pays off the loan. If you fail to repay the loan within 30 days, you’ll be hit with high penalties and late fees, potentially driving you even deeper into debt. One study on payday loans showed that the average payday loan borrower spends an average of $520 in fees to repeatedly borrow $375.

It won’t help your credit score – even with responsible borrowing.

While payday loans may offer instant gratification, they are not likely to help improve your credit score. If you don’t have the money today, what would need to change to ensure you have the money to pay back the loan and interest? This is an important consideration in avoiding becoming trapped in a cycle of debt.

Before you throw in the towel and resign yourself to a future of financial struggles – let us introduce you to a better borrowing option: the World personal loan.

Why a personal loan is a better alternative to a payday loan.

At World, we offer personal installment loans to people with good credit, bad credit, poor credit and no credit, and we always take your entire financial picture into consideration when reviewing your application. With a personal installment loan, we lend you a set amount of money and you pay it back in fixed installments each month. Personal installment loans allow you to borrow money based on your overall financial picture. We also work with you to establish a monthly payment schedule based on your ability to repay the loan and create long-term financial stability.

Unlike many payday lenders, we do report to credit bureaus, which means over time you can establish a history of on-time payments that improves your credit score. This positions you for improved financial wellness, more lending options and better rates.

But you don’t have to take our word for it. Here’s what Laura S., a World Finance customer has to say:

I have been doing business with World Finance for a couple of years now. The loans offered here are way better than your average payday or personal loan. First, the qualifying is quite simple…the interest rate is very reasonable unlike the payday loan. I say thumbs up!!!
– Laura S.

Ready to get back to the good? Apply for a World personal loan today.

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