What exactly is a Bad Credit loan?
If you have done any amount of web surfing in the last few months – and we know you have, because you’re doing it right now – you have no doubt heard the expression “bad credit loan.”
It’s no secret: although the term Bad Credit loan is fairly new, it is actually just a new name for an existing product. Payday loans, also known as cash advances or paycheck loans, have been around for decades. (more…)
Payday loans are more widely used then ever before: with over 70 million Americans unbanked or underbanked, some studies show that up to 30% of Americans use a payday loan at one time or another. Some of them rely on these short term loans on a monthly basis to bridge the gap between paychecks.
All said and done, the payday loan industry generates about $40 billion dollar per year. That’s a lot of loans.
While most people use these loans judiciously, others are a little more vicarious when it comes to borrowing money. Here are a few choice examples of good and bad reasons to take out a payday loan. (more…)
For most people, there are really only two legitimate choices for taking out a loan. Yes, there are banks, and yes there are credit card companies that can extend you a line, but it takes money to borrow money, and you have to already have credit if you want to get credit.
So for most of the rest of us, there are just the two choices if we need to get a short-term loan:
If you have never needed to borrow money before, you may be asking what the difference is between the two. It all comes down to collateral. (more…)
They say there is nothing new under the sun, but in the bigger picture, that simply isn’t true at all. Example? Payday loans.
Although there have been independent lenders for as long as there has been money, what we call payday loans or cash advances actually began very recently. The first payday loan stores opened in Kansas City in the early 1980s, after Congress deregulated the lending industry and opened the door for private lenders to set their own interest rates.
This new kind of lender did well at first, and within a decade there were 200 different payday lenders in the US.
Since then, the industry has grown and expanded to an amazing degree: by 2006 there were over 20,000 payday loan stores, and a rising number of online lenders. The total loan volume was over $28 billion.
Payday loans exploded in America, and quickly started reaching out into other countries. From the handful of small lenders in Kansas City, the payday loans business has gone global, and generates hundreds of billions of dollars worth of loans. (more…)