The Advantages and Disadvantages of Bad Credit Payday Loans

If you are in a financial bind or have an emergency that requires quick cash, you may have considered using bad credit payday loans to help you until your next paycheck.

If you are new to the world of cash advance payday loans, you might wonder what the pros and cons of taking out a loan are, as opposed to the repercussions of the late penalties and reconnection fees that you might face if you do not.

While payday loans can be expensive due to their extremely high interest rates and fees, sometimes, the loan rate can be a lot cheaper than the alternative of late penalties or overdraft fees.

What are payday cash advances?

Payday cash advances are also commonly known as bad credit payday loans. These terms are interchangeable due to the nature of the loan. Payday advances are short term loans designed to help people in emergency situations. They are typically used by people with bad credit, because they do not require a credit check in order to qualify.

While bad credit is acceptable for payday loans, sometimes, people with good credit use them because they need money in a hurry and cannot wait for a traditional loan or they do not want any additional debt on their credit report.

Payday loans are based on your pay and only require proof of income and identity to qualify. They are usually issued for a term that ranges between 14 to 35 days, but some lenders offer repayment terms that can extend as far as 180 days.


  1. Qualifying – It is easy for anyone who is gainfully employed to qualify for bad credit payday loans. Most lenders only require proof of income or bank statements and proof of identity. Once this is provided, the loan is usually approved.
  2. Approval – Once proof of income and identity is provided, most payday loans are typically approved, on the condition that you do not have any other cash advance loans or have not defaulted on one in the past.
  3. Convenient – Payday loans are a fast and convenient way to get cash in an emergency. Most lenders are open longer than banks and credit unions, and some online lenders offer around the clock service. Online lenders can take longer to process, but some offer funds within several hours of your application.


  1. High rates and fees – Bad credit payday loans come with pricey interest rates and fees. This is because they do not require a credit check in order to qualify. On average, a one hundred dollar loan can cost between twenty-five and thirty dollars for seven to fourteen days. This greatly increases the more you borrow and the longer it takes to pay it back.
  2. Terms – Since terms vary from state to state and company to company, it can be difficult to decode all of the legal jargon. It is important to carefully read all of the terms and conditions to make sure there are no hidden fees.
  3. Dishonesty – Not all payday loan lenders are trustworthy. You have to be careful when selecting lenders for bad credit payday loans to make sure they are reputable and operate using fair practices and upfront fees.