The huge drop to 8.8% of the unemployment rate has led many analysts to predict the improvement of the economy. However, they still see the challenge of many borrowers with bad credit rating in paying off their debts especially the interest rates it incurs.

The usual types of loan bad credit borrowers are applying for are unsecured loan and cash advance payday loans. Although these two loan types are the only options that bad credit borrowers can choose from, they realize that these loans cause their debts to pile up. Because of this, it is important to conduct a thorough research before deciding to obtain any of these two types of loans.

For unsecured personal loans, it is best to go through the credit check process to be able to determine the rate of interest of the intended loan amount. In terms of cash advance payday loans, even if credit check process can be avoided, consider the fees that go with it. The average amount of upfront fees is from $15 to $35. This estimated amount is charged for every $100 of the loan amount. These fees change depending on the lender and the state from which the borrower applies for a loan.

Before taking any of these two loans, prepare an exit plan. This means that the borrower must know how to exactly settle the loan. Without this preparation, the borrower will struggle in making monthly payments for an unsecured loan or fully paying a cash advance payday loan.

Bear in mind that cash advance payday loans have to be paid in full using the borrower’s next pay check. Without doing this, the fees will reset and the borrower will incur more and higher charges. When this happens, the interest and loan payment will increase. Consequently, it will add up to the list of the borrower’s debt.

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