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Get answers to commonly asked questions related to the credit score and credit reports
Credit score has become an integral part of your credit life. Whether you accept it or not, bad credit has a lot of impact on your life. From rejected loan applications to higher rate of interest or a higher downpayment, anything is possible. And of late, credit score has also started to affect your employment opportunities. This is already being done by certain employers like those in regulatory roles like IRDAI and SEBI. This trend is only picking up traction with more and more employers asking for credit reports of prospective employees.
The period of a month end is particularly tough one for the salaried lot. Without a proper budget, it is easy to run out of cash by the 2nd half of the month when individuals either look at their friends or family or the unorganized sector for sailing through the other half of the month till salary gets credited again.
A full-fledged personal loan may come at a high rate of interest considering the bad credit score. So is going to the unorganized sector the only way forward for a salaried individual looking for some extra cash?
CreditMantri, as your credit coach is always at your service and keeps abreast with the latest products launched in the world of credit and makes a wonderful job of matching the needs of various individuals with the right credit product, thereby making it a win-win situation for our clients.
Through this post of ours, we discuss the availability of Payday loans for individuals with bad credit.
The first question that you might have on your mind is what do payday loans stand for? Payday loans are new-age loans lent by Fintech lenders that go on to plug the cash crunch that you may face at any time during the month. There may be some emergency situations that can wipe out the entire amount credited much before the end of the month.
To cater to such needs of individuals, many companies have come in with loans that are called Payday Loans or Salary Advance loans. They are basically very short-term unsecured loans that are made available in a very short period of time. As these loans are lent by fintech lenders, they do not give that high a priority to your credit scores, which makes it easier for individuals with bad credit also to avail these loans.
Instead of credit score, these fintech lenders make use of data sourced from your digital imprint like social media profiles, shopping on websites, etc. Coupled with Artificial Intelligence, these data points aid the lenders in making their lending decision.
These loans can be availed till the time your salary is credited or any shorter period. Interest on these loans is charged on a daily/monthly basis.
Payday loans can be easily accessed by anyone with an App or on the website of the fintech lenders. There is no need to visit the branches of any lender.
Payday loans are loans made available by modern day lenders and hence, require minimal documentation. Often it is just the salary statement and identity and residential proof that is required. You need not run around for photocopies of these documents. A scanned copy of the documents can be easily uploaded on the app or website.
A personal loan, which is an unsecured loan is one of the easiest loans to avail with the least amount of documentation. This loan could also take anywhere between 2-4 days to a week for disbursal depending upon other factors. In contrast, the payday loans are immediately transferred into your bank account. Some lenders also allow you to shop with their partners and pay with no cost EMIs. One of the Payday lenders, EarlySalary, is in the process of launching a RuPay card which acts like a Debit Card, making paying for your needs extremely easy.
These fintech lenders are in sync with your repayment patterns and if you show instances of being responsible with credit, the next time your borrowing limit may be increased.
For Example: If for the first time you are allowed to borrow 50% of your salary and demonstrate on-time payment, you may be allowed higher limits of 70-80% the next time.
There is no restriction on the usage of this borrowed money. It could be put into any use as desired by the borrower.
As with personal loans, there are no foreclosure charges on a Payday loan. You can choose to repay the loan as and when you wish without incurring any penalty.
Higher Rates of Interest
Payday loans prove extremely convenient and are available even to those with bad credit score. However, when you look at the interest charged by these lenders, they work out quite high.
Easy Availability of Loans May Lead into a Debt Trap
These loans are quite easily available which may prompt an individual to avail these loans quite often and before you realize it may develop into a habit. Such situations may lead an individual towards a debt trap which might prove difficult to get out of.
Not Suitable to Self-Employed Individuals
Payday loans are catered to meet the cash crunch of salaried individuals. So these loans do not meet the needs of self-employed individuals or entrepreneurs who may not be availing a paycheck at the end of each month.
Earlier Repayment is the Key to Keeping These Loans Cost-effective
The earlier an individual is able to repay these loans, the overall cost of the loan remains low. Or this kind of a loan proves very expensive to avail.
Availing of Payday Loans involves a simple uncomplicated process.
CreditMantri has a tie-up with multiple lenders that offer payday loans. You can avail a Salary Advance or a Payday Loan right here from our website.
Payday loans do come across as a convenient way of availing a loan especially for those who have bad credit score. However, you may want to weigh in on the high cost of availing these loans too before making the decision for availing these loans.
A CIBIL™ score is a three digit number between 300 and 900 that gives potential lenders a quick idea of your loan
Credit repair involves rebuilding your credit health to a level where you become eligible for loans.
A CIBIL™ Score is an indicator of an individual’s credit worthiness. It impacts the individual’s ability to borrow
A credit report is a history of your credit behaviour and contains detailed information on all your loan and credit
A credit rating - also known as a credit score - is a 3 digit number between 300-900 that gives potential lenders
A bad credit score is generally one that is less than 650. A credit score is a three digit number in the range of 300-900
Yes. In fact, a credit score of 850 is very good! Most lenders look for a minimum credit score of 750 to approve loans
There are several ways in which you can improve your credit score. Depending on how good or bad your score is,
Is 800 a good credit score? Yes. In fact, a credit score of 800 is very good! Only a small percentage of people reach,
Is it possible to obtain a free credit check or credit report? The answer is yes and no!
Your CIBIL™ Score plays an important role in getting loans and credit cards sanctioned, because it gives lenders
It is not possible for anyone, either lenders or borrowers, to get a CIBIL™ score or credit report for free.
It is important to know that there is no such thing as a CIBIL™ defaulter list. There used to be a defaulter list earlier,
There is really no number that can be established as the average credit score in India. Many people see regular
You can repair your credit absolutely free if you do it yourself! However, many people choose to get professional help
First, it is important to note that there is no ‘Defaulters List’ that is maintained or circulated by CIBIL™ or any of the other
Sourav and Ankit are watching the New York Marathon on TV and decide that they want to run a marathon.
In India, the best credit score to have is one that is 750 or above. The three credit rating agencies that operate in India
Is a credit score of 700 good? While it is not a very bad score, it is not good enough to automatically qualify
It is difficult to get a loan with a credit score of 650. Most banks look for a minimum score of 750 when deciding
It is not likely that you will get a loan with a credit score of 600. Most banks look for a minimum score of 750
It is difficult to get a loan with a credit score of 550. Most banks look for a minimum score of 750 when deciding
A poor CIBIL™ score can increase your financial problems and make it difficult to access credit, whether as a loan or credit.
One common worry that runs through your mind after you have made a credit card settlement is,
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