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Millions of Americans have poor credit scores, and when in need of a loan, they often feel that the options for borrowing some cash are deadlocked. Nevertheless, they should not forget about second chance loans. These loans are aimed at giving a second chance to the borrowers who had some credit default previously and can’t take avail of traditional lending options as bank loans. This being said, second-chance loans are often sought by borrowers with poor credit scores.
What Are Second Chance Loans?
Second chance payday loans are quick solutions for money emergencies. These loans are not large in amounts ($200-$2500) and are provided for a limited repayment period that does not usually overstep several weeks. You take out the loan, cover your emergency expenses and pay it back as soon as your next paycheck is due. We are more interested in providing financial assistance to solve your minor issues rather than overwhelming you with long-term obligations.
The Processing of Second Chance Loans
2nd chance loans are processed online within minutes. The quickness of the lending procedure depends on the fact that getting approval for these loans is not based on the FICO score. In other words, the lenders don’t carry out hard pulls that prolong the lending process. What’s more, the requirements for getting the loan are not so strict, and you can submit the loan request from everywhere, as you don’t need any documents to complete the request.
Though some people may state that payday loans are a bad borrowing option, as they are costly, they can solve many problems when used sensibly.
The Benefits of 2nd Chance Loans
If you still wonder whether these fast lending options are good for you or not, look at the list of benefits:
- Fast funding
- Comfy and handy lending procedures
- Soft credit pulls
- High chances of approval
- Low requirements
- Secure application processing
- Competitive interest rates
- Zero paperwork
- No collateral is required
- Free use of the obtained funds
Thus, 2nd chance payday loans are aimed at bridging the gap between your paychecks.
The Purposes of Taking out Payday Loans
Though the lenders don’t keep track of how you spend the loan, you should be careful not to misuse the borrowed money. Second chance payday loans aim to cover emergency expenses that may pop up in the middle of your paychecks. Therefore, these loans are not a good option if you want to make a big purchase, organize a party, etc.
It would help if you thought of these loans as a salary advance, and on your paycheck, you will get your wage minus the amount of your loan. Then, do reasonable calculations to find out whether you afford to pay the loan back or not.
Second Chance Payday Loan Rollovers
Some lenders may give the borrowers a chance to renew their loans if they can’t pay them back. However, loan renewal or rollovers mean paying additional fees for extending the life of the loan. But these extra fees do not reduce the principal amount of your loan, and you still have to pay the loan back in a lump sum together with the interests.
Be informed that rollovers are subject to state laws. Therefore, prior to signing a loan agreement, we recommend checking your state laws and regulations. For example, in some states, rollovers are banned; in others, they may have certain restrictions, while such extensions are allowed in the third. Besides, it would help if you were very attentive to the points related to the rollover possibilities in the loan contract.