Are Payday Loans Your Only Option When You Have Bad Credit?

Have Bad Credit

When times are tough, payday loans may seem like your only option in Texas. But are they?  Keep scrolling to learn more about these short term loans online  if you have bad credit and how online installment loans in Texas may provide an alternative. 

Why Do People Turn to Payday Cash Advances?

An unexpected expense can be hard on any wallet, but it’s especially challenging when you have zero savings and a lousy credit score. 

Unfortunately, emergencies rarely take this into account. They hurtle into your life regardless of how prepared you are to handle one. Life just happens — you lose a few shifts at work, there’s an unplanned repair on your air conditioner, or you get stitches at the ER. 

Borrowing money might be the only way you can handle these expenses and get back on your feet. 

The only problem is, your bad credit can complicate finding a loan. A low score tells financial institutions you’ve hit some speedbumps in the past that cast doubt on your ability to repay what you owe today. 

Some financial institutions won’t lend you any money if you fall below their benchmark. But direct payday lenders don’t have these limits. They might be willing to play ball even if you have rock-bottom credit.

The Reality of Bad Credit and the Cost of Lending

Rightly or wrongly, your past borrowing behavior reflects your future habits, and a low score flags you as a potential risk for lenders.

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Some lenders consider this risk too great to write you a check. But direct payday lenders hedge their bets another way. They tend to raise their prices, so you wind up paying more to borrow than if you had good credit. 

How much you pay depends a lot on your location. Each state regulates the rates that direct payday lenders can apply on their cash advances, and some (like Texas) have looser restrictions. 

According to the Center for Responsible Lending, Texas has the highest average rates in the country. The typical $300 payday loan in the Lone Star state is 664%. 

Short Terms and High APR Can Post a Challenge

Online payday loans might still be the best choice, even at that cost. However, direct payday lenders also expect you to pay everything back by your next payday. That gives you about two weeks to come up with your entire cash advance. 

These short terms can be challenging to hit on time if you’re already struggling to make ends meet. Living paycheck to paycheck means you have very little cash left over after paying the essentials, so you may not have enough room in your budget. 

So, Are There Alternatives?

There’s good news: there are other options online that give you more time to repay what you owe. You might qualify for an installment loan for bad credit, no matter how low your score is. 

In a state like Texas, where interest rates are higher, you might still pay more to borrow an installment loan online. However, Texas installment loans come with an extended repayment period. 

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The best installment loans Texas has to offer spread out your payments over multiple months. Each payment will be smaller than what you borrowed, so you never have to come up with the money in one go.

This extended time frame might be easier to handle when things are tight. But you won’t know until you sit down with your spending plan and crunch the numbers. Compare the rates, terms, and conditions to be sure. 

If a direct payday lender’s short turnaround would be hard to match, consider the alternative. An installment timeline gives you more breathing room, so you might find it easier to juggle your debt with other important bills. 


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