Getting a Loan? Ways to Get a Payday Loan
While the place to apply for a payday loan may be your bank or credit union, you can also consider an online loan or a 0% APR credit card. While each option comes with plenty of advantages, the best option for you may depend on your credit score and your unique loan needs.
Determine Your Credit Worthiness
As you prepare for a payday loan, the best first step is finding out your credit score. This three-digit number is a numeric manifestation of your credit health, and it plays a huge role in the type – and quality – of loan you can qualify for.
Getting a free copy of your credit score will help you determine your next best steps. From there, you can start shopping for loans among varying banks and financial institutions.
If you have excellent credit (a FICO score of at least 720), your best option is almost always a 0% APR credit card. With these cards, you will pay 0% on purchases for anywhere from 12 – 21 months.
The biggest benefit is that you can avoid paying interest on your purchases during the card's 0% introductory offer period. Not only that, but you don't have to visit a bank or gather excessive paperwork, either. Most of the time, you can apply for a payday loan online.
If you have good credit (A FICO score between 690 and 719) and can't qualify for payday loan, you should be able to qualify for a payday loan from an online bank or traditional lender. The better your credit score and the higher your income, the more money you can borrow and the better loan rates you'll receive.
If you have average credit (FICO scores between 630 and 689), you will likely need to apply for a payday loan with an online bank or traditional lender. Depending on your income and payment history, you could still qualify for a quality loan with low rates and fair terms.
With bad credit (a FICO score between 300 and 629), it's unlikely you'll qualify for an unsecured loan without a co-signer. You may need to take out a secured loan with collateral, such as your car or any land you own. You can also consider finding a family member to guarantee the loan.
Shorten Your Payday Loan Term
Another way to get the lowest rate possible on a fixed rate payday loan is to choose a shorter term, say one or two years instead of three or four years. The term is the time it takes you to pay off the loan, and short term rates are often lower than longer terms, though they do also come with higher monthly payments.
Compare Low Interest Payday Loans
It pays to shop around when you're looking for the best low interest rate payday loans, as rates can vary widely from the many lenders that offer them, such as bricks-and-mortar banks, credit unions, finance organizations , and even online financial companies and peer-to-peer lending sites. Always comparison shop different lenders when shopping for a payday loan.