Posts tagged: poor credit personal loans

Poor Credit Personal Loans

With poor credit personal loans your challenge is not going to be qualifying for them; getting the money deposited into your account is going to be relatively easy because the application process is ridiculously simple. No, your challenge won’t be getting the money. It will be paying it back. So let’s talk about how that’s going to happen.

Let’s say you borrow a personal loan with poor credit, and the term is 14 days. You borrow $300. There are a couple of serious issues to address here. The first big one is that the lender is probably charging you between $15 and $25 per hundred dollars you borrow (it starts to add up fast if we’re talking about something as big as $25000 personal loans, which means you start out with loan (effectively) of say $345, being somewhat conservative. You just borrowed $345, and the money is due two weeks from today.

A couple questions:

1. How many paychecks will you be receiving between now and two weeks from now?

2. What percentage of one of your normal paychecks is $345? If you normally earn $500 per week, $345 represents about 35% of your gross pay (before taxes) for the next two weeks. Keep that in mind.

3. Of the next two paychecks you receive, will $345 of what’s left over after taxes be available to pay off this debt? What bills are due over the course of the next two weeks?

4. Finally, and most crucial of all, will you actually be able to have the balance paid in full by the due date? If not, do you realize you’ll be paying extension and renewal fees? I read a statistic on a consumer defense website that said personal loan borrowers with poor credit can average around 10 renewals per loan. Ten!? By the time you pay all the renewal fees on that personal loan you will probably have paid back more than double what you borrowed, and all within a few months. This is why you hear that the ‘real’ interest rate on these loans is often over 500%.

So I would ask you to read through the set of questions I asked above. If those questions make you realize that instant unsecured personal loans can going to hurt you much more than they will help, find another way to make it through your week till your next paycheck! You’ll save yourself tons of money, stress, and lost sleep.