To apply, qualify, and be approved for a loan is already a painstaking process without factoring in bad credit. For someone with low credit scores or no credit history at all, it can be difficult—if not impossible—to get financial assistance from traditional lenders.

With unexpected expenses and emergencies, keeping the lights on between pay periods sometimes necessitates more money than your budget can afford. In financial binds such as these, especially for those with poor credit, payday loans may be the way to stay afloat. Bad credit payday loans provide a convenient way to acquire short-term financing, without requiring collateral or credit checks. However, they do come with tradeoffs.

The Downsides

A bad credit payday loan is essentially a short-term, low balance, high-interest loan, usually due for payback on the borrower’s next payday, and needing no credit check for approval. They are typically marketed to those with substandard or no credit scores. The payday loan amount is commonly around $500, sometimes less.

If approved for a payday loan, the borrower will write a post-dated check to be cashed on their next payday, or they will sign an automatic withdrawal authorization form allowing the lender to withdraw the amount due from their bank account after the date of their next paycheck.

In the event that the borrower is unable to repay the loan after their next pay date, they can roll the loan over into a new one that includes the current loan and fees, as well as a new loan and new fees. Rollover of bad credit loans results in the borrower owing far more money than they were originally lent, and often leaves them in a cycle of augmenting debt.

The Cycle Continues

Before taking out a bad credit payday loan, consider the fact that over 80% of borrowers either rollover their payday loans or default within a year. Extremely high rates and extremely short terms, along with additional fees warrant skepticism and careful planning for bad credit payday loans. If prepared for and done right however, bad credit payday loans can also be extremely convenient, as low credit scores have no effect on approval and the access to funds is quick.

Even if you have bad credit, there are other options. To explore those loan options, visit