Are those loan companies that give loans to people with low/no credit legit? Are there any negative affects?

Question

Are those loan companies that give loans to people with low/no credit legit? Are there any negative affects?

Answer 1

If they are posting here they are all SCAMS. They will want you to sent them money to get the loan and then you will never get a loan.

Answer 2

Some are scams -- watch out for any kind of advance fee.  Legit lenders will take fees from the loan.

The interest rates are bound to be very high.  High risk = high interest.

Answer 3

If you are referring to those Payday loan companies they are legal, but the interest rate is outrageous.  The negative affect is huge.  It becomes a trap.  Think about it this way:

You are $300 short.  You get a payday loan for 2 weeks.  They usually charge $20 for every hundred borrowed per week.  You agree to pay back the $300 + $60 interest.  When payday comes, now you are out the $360 which puts you that much short for the next 2 weeks.  Most of these places only allow increments of $100, so now to make up what you are short you go back and borrow $400 + $80 interest.  You get deeper and deeper each payday.  

It can be extremely difficult to break this cycle.

Answer 4

There are some legit companies that offer loans to people with low/no credit.  I am not sure where you are, but American General Finance & Beneficial are two in my area.  But the interest rate is going to be high!  Try to pay it off sooner or later, the interest rate will be at least 19-21%.