Have you ever needed some extra money for the weekend? Many people can get through a week’s worth of expenses and still find themselves short on cash for bills. But when the banks are closed until Monday, what can you do? This is when many folks opt for weekend payday loans. But any payday loan you’re considering may come with extremely high interest rates and unfavorable terms. So be careful.
In this article, we’ll take a look at these loans and whether or not they’re worth the financial risk.
What Are Weekend Payday Loans?
Weekend payday loans are short-term unsecured loans that are designed to fix a short-term lack of available funds. It would help if you didn’t even consider one unless you know you can repay it on time.
Weekend payday loans work like traditional payday loans, with a couple of differences:
- Instant loan approval. Weekend payday loans online are approved even faster than a standard payday loan. And they can be approved 24/7 through an online weekend payday lender.
- They have short loan terms. Borrowers will need to make full repayment in anywhere from two to four weeks in most cases.
Unexpected emergencies can throw off an entire budget. And many people are already strapped for time and can’t wait for a traditional loan. This is when many decide to use online payday loans.
Unlike other types of traditional secured loans, weekend payday loans online are particularly easy to obtain. Additionally, weekend payday loans are just as accessible as any other loan for people with bad credit. But what they may offer with speed and convenience won’t make up for the risks.
Risks of Weekend Payday Loans
Regarding if payday loans are fixed or variable rate, most payday lenders offer fixed rates. But, no matter what kind of payday loan you’re considering, it will likely come with a high cost. In fact, payday loans can have interest rates that surpass 600%!1 Payday loans, in general, tend to offer extremely high interest rates and unfavorable loan terms.
High rates and short repayment periods can make them difficult to pay back on time, or at all. This leads to something called “rollover.” Loan rollover is when the lender offers to extend your loan term. And while this may sound like a good thing, they also attach more fees and interest to the new loan. This can make the new loan even more difficult to repay than the initial one. This is how many payday loan borrowers end up in a cycle of debt, even if they just sign up for a seemingly simple 3-month payday loan.
Rollover, high rates, and short repayment periods make payday loans a very risky financial move.
How Do Weekend Payday Loans Work?
A payday loan borrower will go through much of the same process as any other loan applicant. After choosing a lender, the borrower will fill out an online application, providing the necessary information.
After you complete the application, a decision on the loan will usually be made immediately. The lender will then email documents that detail the loan’s total cost and terms for repayment. It’s imperative that you read these terms and conditions thoroughly. Once the borrower electronically signs the papers, the loan amount is sent via direct deposit. From application to loan disbursement, the whole process can sometimes be completed within the day!
While requirements can vary from lender to lender, almost all loans will require you to meet the following criteria:
- Be at least 18 years of age
- Provide a form government-issued ID
- Have an active bank account (either checking or savings)
- Have a valid phone number and email address
Weekend Loans With Bad Credit?
What credit score is needed for a personal loan? Most people broadly understand that bad credit is a significant factor in determining what types of loans are available to a potential borrower. A credit score is an assessment of a person’s overall creditworthiness. It’s a tool that lenders and creditors use to decide whether or not to give a loan to a person. Calculated after a review of a consumer’s payment history and overall usage of their available lines of credit, a credit score is a three-digit number that ranges from 300–850. A credit score of 600 or below is considered a bad credit score.
Good credit scores indicate an excellent history of managing payments, which means that people with good credit have access to loans with better interest rates. On the other hand, bad credit signals a higher risk to a lender. So, a borrower with bad credit is a riskier customer and is charged a higher interest rate.
Unlike loans offered at a bank, payday loans don’t require evaluations of credit scores or lots of other financial information. As they were created for customers who may not be eligible for financing options, payday loans are made available to people who can pay them back, regardless of their credit history.
Impact of Payday Loans on Credit
|– Soft Inquiry: Some payday lenders might perform a soft credit check, which doesn’t affect your credit score. – Hard Inquiry: If a hard credit check is performed, it can lower your credit score by a few points for a short period.
|– No Credit Requirement: Many weekend payday lenders don’t require a credit check, making it easy for individuals with bad credit to get approved.
|– On-time Payments: Weekend payday loans aren’t typically reported to the major credit bureaus, so on-time payments may not improve your credit score. – Missed Payments: If you default, the lender might sell your debt to a collection agency. If reported, this can significantly harm your credit score.
|– Increasing Debt: If you can’t repay the loan on time, some lenders offer a rollover or extension for another fee. This increases the amount you owe, making it harder to pay back and potentially causing a cycle of debt.
|– Negative Impact: If you default on a weekend payday loan and it’s sold to a collection agency, the collection account can appear on your credit report and remain for up to seven years, severely damaging your credit score.
|Loan Amounts vs. Credit Utilization
|– Not Applicable: Since weekend payday loans aren’t traditional credit, they may not factor into your credit utilization ratio, which is a significant component of your credit score.
|– No Positive Impact: Successfully paying off a weekend payday loan might not boost your credit score since many payday lenders don’t report to major credit bureaus.
|– Debt Cycle Risk: Taking out multiple weekend payday loans can lead to a cycle of debt, making it challenging to meet other financial obligations and potentially leading to missed payments on other bills, which can harm your credit score.
Other Options for Weekend Loans
Even for their convenience and ease of approval, you may decide that a weekend payday loan isn’t the right choice for you. Here are a couple of other avenues that you may want to explore that may be able to provide cash for the weekend:
Credit Cards Advances
If you have a credit card with an available balance, getting cash may be as easy as visiting your nearest ATM. Many credit card companies offer cash advance loans to their customers that can be withdrawn the same way you take money out of your checking or savings account. First, however, it’s essential to understand your card’s fees for cash advances; typically, this service is offered for additional fees and is subject to a much higher interest rate than a regular credit card purchase.
Pawn Shop Loans
A pawn shop loan is another way to get cash quickly. A valuable item can be given to a pawn shop as collateral in exchange for a loan worth up to 60% of the item’s value depending on the shop. So a person can walk into a pawn shop with their valuables and walk out with cash, which makes it just as fast as a payday loan—if not faster. However, know that your collateral will be lost to the pawnshop if you don’t manage the loan well and repay it on time.
Although they come with a lot of risks, these alternative options allow a borrower to take a little more time with repayment. Consider them if you need more time than a couple of weeks to repay a loan.
Is a Weekend Payday Loan Right for You?
The convenience of a payday loan is the main benefit, but the risks outweigh the convenience. You may be able to get money quickly, but you could be setting yourself up for a financial headache down the road.
A weekend payday loan is an expense that has to be paid as soon as possible. So be sure to shop around for a loan that works best for you and know precisely how much you’re going to have to repay so that you can plan to include it in your budget. Any payday loan can turn into a problem for many months to come if it isn’t correctly managed.
FAQ: Weekend Payday Loans
A weekend loan is specifically designed to provide borrowers with funds over the weekend when most traditional banks are closed. While regular payday loans might take a business day or two to process, weekend loans aim to offer quicker access to funds, even on a Sunday.
Yes, many direct lenders specialize in weekend payday loans. These lenders operate online and can process loan applications and disburse funds even when traditional banks are closed.
Having a bank account, especially a checking account, allows the direct lender to deposit the loan amount directly into your account. It also provides a means for the lender to withdraw the repayment amount on the due date.
A cash advance typically refers to borrowing money against your credit card limit, while a weekend payday loan is a short-term loan provided by direct lenders, often without considering your credit score. Cash advances might be available through your credit card company, while weekend payday loans are offered by specialized lenders.
Yes, many direct lenders offer Sunday payday loans specifically for those unexpected financial emergencies that occur over the weekend. You can apply online and, if approved, receive funds even on a Sunday.
To find the best weekend payday loans, research various direct lenders online, compare their terms, interest rates, and customer reviews. Ensure the lender is reputable and offers transparent terms without hidden fees.
Most direct lenders prefer a bank account or checking account as it allows for easy deposit of the loan amount and withdrawal of repayments. However, some lenders might accept a savings account. It’s best to check with the specific lender about their requirements.
The repayment terms can vary, but most weekend payday loans are short-term, meaning you’ll likely need to repay the loan within two to four weeks. Always check the terms provided by your direct lender.
Weekend payday loans can sometimes have higher fees or interest rates due to the convenience of receiving funds outside regular banking hours. However, rates can vary among direct lenders, so it’s essential to compare and understand the terms before borrowing.
While it’s possible to apply with multiple lenders, it’s crucial to be cautious. Borrowing multiple loans can lead to a cycle of debt, making it challenging to manage repayments. Ensure you can afford to repay any money you borrow.
A Word From CreditNinja on Weekend Payday Loans Online
There are always times when we think we could use some extra cash. However, quick weekend loans can come with serious drawbacks like high rates, heavy fees, and inconvenient repayment schedules. Instead, CreditNinja suggests trying more sustainable options first, like reorganizing your budget or dipping into your own savings.
But, if you find yourself in a situation where you absolutely need a cash advance or a loan, consider a CreditNinja personal loan. CreditNinja installment loans can be a great alternative over weekend loans, and may help you get your finances back on track once and for all! Looking for more information about online loans and budgeting? Check out the CreditNinja blog dojo for tons of free resources!
- Payday loans can have interest rates over 600% | CNBC
- What Is a Payday Loan and How Does It Work? | Experian
- How Do Payday Loans Work | Credit.com