For most people getting a loan when you have a bad credit history is almost next to impossible, especially if you approach normal lenders such as your normal banks or finance companies. This however belies the truth with the bad credit market being the hot market for most lenders now. Obtaining bad credit payday loans isn't hard.

Despite the latest credit market squeeze experienced by the sub-prime mortgage and housing market, the payday loans market is relatively untouched because of the different default rates and the unique situation with payday loans. Payday loans are normally of a small amount and very few people actually default on the loans thus keeping the market relatively intact. This means that the acceptance criterion hasn’t changed and the rates are still the same as before.

The first thing that most people should understand when applying for payday loans is that its purpose and the design of this financial instruments means that it is only useful for very short term loans that require only small amounts. This is because payday loans are generally considered the most expensive source of money around but also the most convenient.

Most of the time lenders will not even bother going through a credit check and thus applicants with bad credit might not even be charged for the extra risk they carry. It is however vitally important to understand that even if these lenders don’t check for credit histories, most of them will report to credit reporting agencies and a default on a payday loan can be extremely bad for your credit history.