4 Mistaken Impressions

Get the right impressions about bad credit loans

Most likely, this isn’t your first time to have heard of loans for people with bad credit. At one point, we all have been strapped for cash, in need of money, stuck with a bad credit score, or have taken a loan out, whether short-term or the regular type you get in banks.

With the ever-unpredictable economy, the number of people taking out short-term loans is also steadily increasing. PewTrust estimates that about 12 million Americans take out payday loans every year – and this refers only to payday loans, one type of loan for people with bad credit.

But with the popularity of these loans come questions, doubts and misconceptions on these loans. We’re sharing 4 mistaken impressions about loans for people with bad credit that are important to know about.

Loans for people with bad credit are evil. It is true that most short-term loans, such as payday loans can have interest rates and charges that are relatively higher compared to those offered in regular bank loans. However, these loans are not necessarily evil. They can become only a liability when you when you take out more loans than you can afford to pay.

Loans for people with bad credit are all about payday loans. It has become common to assume that both are synonymous and interchangeable, but the fact is that payday loans are just one type of loan for people with bad credit. Other options and forms abound, including personal loans that you take out from family or friends, or a cash advance from your salary.

You don’t need a soft credit search. Contrary to general opinion, however, a soft credit search allows you to review your file to make sure there are no mistakes, see whether there are any unusual activities (which could indicate fraud) and help you better evaluate the chances of your loan approval getting approved.

Early repayment is okay. Not all loans for people with bad credit are created equal, and their difference usually lies in the fine print. Some lenders, for example, actually have penalties and additional charges for early repayment, so make sure that you read the fine print before signing on the dotted line.

Knowledge is power. It’s easy to be swayed by popular opinion or by marketing adverts, but with the right information, you can make the right decisions about your financial future.