No one said that being your own boss is the dream. Regardless of the business’s size, there are times when you may experience problems with the cash flow – which will obviously be bad for your finances.
Sometimes, you need some help to stay up; but what happens if you are so deep in debt and bad credit that even banks won’t lend you a hand? There are plenty of loans for bad credit; you just need to know what to choose.
Thankfully, if you need money quickly, you can easily opt for payday loans. Granted, the interest rate is much higher than a regular bank, but it’s still better than nothing.
How Can a Payday Loan Work for a Self-Employed Person?
These loans are convenient for people who want to borrow anything from $100 and $2,000, but there are also short-term payday loans that can go up to $10,000 if needed. Furthermore, since they are “payday” loans, the repayments will be set around the date that you receive your pay.
Lenders will look at your banking history to help you come up with a repayment plan that you can afford. In the end, all they want is to get their money back.
You may, however, be asked to bring proof of your business’s income, since you cannot bring a payslip per say. They are indeed loans for bad credit that need no check, but they still need to be somehow sure that you can keep up with your payments.
The Benefits and Drawbacks of Payday Loans
While there is a lot of controversy regarding payday loans, there is still a certain charm to them. Here’s what you could benefit from if you went for payday loans.
- Easily available
If there’s something we hate about payday loans, it’s the fact that we have to wait a long time until the loan gets approved. Not to mention that you have to go through a lot of hassle if you are self-employed. A payday loan is easy to find, easy to apply to and doesn’t involve a lot of hassle with the paperwork.
- They accept bad credit
If you are self-employed and you have bad credit to top it off, this is the perfect option for you. Those looking for loans for bad credit are eligible for payday loans since they don’t do history checks and your credit is irrelevant to them.
- Quick access to your funds
Most of the time, if you apply for a payday loan, the chances are that you’ll be able to get your hands on that money in less than 24 hours. You may get it transferred to your account on the same day or at the latest on the next day.
The benefits all sound dreamy; however, nothing this good comes without a price, and you need to be willing to pay it – literally. Before applying for a payday loan, you have to check all the charges that come with it. Furthermore, interest rates are usually much higher than traditional loans, so be prepared to pay a higher sum back if you simply can’t bring good credit to the table.
Tips for Comparing Your Options
Are you decided on a short-term loan, yet you don’t know for sure which one to pick? Here are some ways for you to compare between loans for bad credit.
- How much money you can borrow: Payday loans can offer you anything between $100 and $2,000. You need to make sure that they actually can offer you the amount that you need.
- The charged fees: Lenders who offer payday loans usually have restrictions as to how much they can charge you, but some are still embellished. Ideally, however, they are not allowed to take more than 20% on the establishment fees and 4% on monthly payments.
- How long will it take to repay the loan? The time usually depends on the amount of money that you borrow. However, for some payday loans, you will have to pay it on time – and if you don’t, you’ll have to pay additional penalties.
- Fees charged for late payments: Most lenders will charge you if you fail to make your repayments when you are supposed to. It might be a good idea to compare these fees as well if you believe you might fall behind.
Loans for bad credit are a good option for self-employed Aussies with bad credit – as long as you can handle the higher interest rates. If you are looking for such a loan, you may want to compare the options we have by giving us a call on 1300 123 328 to speak with one of our expert consultants today.
