Payday loans and bad credit payday loans are designed to help an individual who has run out of money before they receive their next month's pay cheque.
Bad credit payday loans are likely to cost more than a similar payday loan for someone who has a clean credit history, although both types are an expensive way to borrow money. Bad credit payday loans are offered by pawn brokers and doorstep loan companies, amongst others and are usually for a short term of no more than one week, until the borrower's pay cheque clears.
Bad credit payday loans are more common than payday loans for someone with no financial problems, as the majority of individuals with a clean credit history are likely to have a bank account with an overdraft facility to see them through until pay day, which would work out considerably cheaper than a payday loan.
Lenders often charge a fee and a high rate of interest for bad credit payday loans, which will eat into the amount a person eventually receives from their pay and therefore increase the likelihood of them needing another bad credit payday loan next month. This type of borrowing is best avoided.
