Payday loans no credit check are short term loans granted to borrowers without a thorough credit check. All that is required from the borrower is proof of a steady monthly income.
Every once in a while you run into an emergency that requires an amount of money, one that you might not have. Most people will go for payday loans no credit check as they are a quick alternative and are approved very easily as long as you have a salary at the end of the month. Other terms used to refer to this kind of loans include, cash advance loans, check advance loans, deferred deposit check loans or post-dated check loans. Contrary to the popular opinion, these are not the loans you want to take in order for you to pay another loan. This is because they charge very high interest rates. Unlike other loans, these are met for emergencies only. Below are some of the reasons why this is so.
Why you should not take the payday loans?
Borrowing and pay back the loan in time does not count on your credit score.
The only good thing about these loans is that they are quick and easy to borrow and the lenders do not go through your credit history to determine whether you get one or not. The downside to this is that even if you pay the loan in time, this will not help in improving your credit score. This is because most lenders will not report your progress to the credit bureau regarding payday loans.
You are required to pay back the loan as soon as possible.
Most payday loans will be equal to the amount of salary you will be receiving. You are required to repay the loan as soon as you receive the salary. If not, you will be paying additional charges which will be costly and to some extent might lead you to get stuck in a payday loan cycle. This is where you are not able to pay your loan in full therefore you have to keep servicing it. This, in the end, leads you to larger financial problems as the financial obligation becomes too much.
Payday loans are the most expensive loans.
Compared to other types of loans, payday loans charge very high interest rates. The average rate of a payday loan is about 400%. This is the annual percentage rate (APR) and is often as high as 5,000%. Having a credit card will cost you an average of 9% and a high of 30% APR. Personal loans go lower than that. Therefore, if you put this into consideration, borrowing payday loans even for emergencies puts you at risk when it comes to your financial future.
What are the alternatives to payday loans no credit check?
Below are some of the alternatives available for you even with a bad credit score of none at all.
Negotiate a cash advance with your employer
Negotiating with an employer only works for the people who have been employed and have worked with the employer for quite some time. Unlike going to creditors, asking for an advance from your employer is favorable because this is someone who already knows you. In addition, the employer will most likely not charge interest on giving you the advance and if they do, it will not be as high as other lenders. If you are an exceptional employee, you will most likely get very conducive terms of the advance.
Charge to your credit card
If you have a credit card, it would be more appropriate to charge the amount to the card rather than taking a payday loan. As already mentioned, credit cards will always offer way less interest rates as compared to payday loans. You will not only save yourself from high-cost interest rates but will also benefit from rewards obtained from using your credit card. You will have a chance to improve your credit score when you pay the credit card fee in full.
Use your bank’s overdraft protection
Overdraft protection is whereby your bank account is linked to your credit card or savings account. In case you deplete the amount of money in your account you will still be able to pay for whatever you need using your bank account. Using the overdraft protection will give you access to an amount of money in your savings account otherwise wouldn’t be accessible to help you pay for the financial need at the moment without having to borrow the money from anyone.
Before going for the payday loans no credit check, always ensure that you have exhausted all the options available for you. Unlike other loans, payday loans are not always the best available for anyone.