Have you ever been in need of a loan to cover for unexpected expenses but your credit score always kept you from getting approved? Ever needed to get a loan but got held back by banks and other lending companies?
This scenario may be more common than you think, with 51% of credit users suffering from subprime credit scores. That said, how can you make sure that you can secure a loan even with an abysmal credit score?
A simple answer to that is to apply for a payday loan. There are a couple of lending companies who can get you a payday loan with no credit check.
Read what we’ve written below for you to learn more about these fast cash loans and if they’re the right choice for you.
What is a Payday Loan?
Payday loans are short-term loans lent to you by a payday lending company or individual. These lenders give you a small amount of money for your expenses, and you pay them back in a minimum of 2 weeks. The interest rates depend on what state you’re in.
They get the word “payday” in their name because where banks tend to take days or even weeks to approve your loan, a payday lender does all the checking, reviewing, and approving all in one day. And they require you to repay it all with interest on your next payday.
Even if you don’t get approved for a loan, the lender will notify you as soon as possible, this saves you from spending too much of your important time waiting around only to get denied in the end.
There are multiple ways for you to get your hands on a payday loan.
There are many branches out there where you can go and get a payday loan. These outlets tend to give you a sense of security and trust by allowing you to meet with your loaner face to face.
These outlets often present you with the sources of their loans and statistics for you to figure out where your loans are coming from.
You can also apply for a payday loan online. This option allows you to have the convenience of staying where you are comfortable being in, giving you extra security while you are handling your finances.
They also present you with a short list in order for you to know where your loans will be coming from.
And the best thing about applying for a payday advance is that you only need to bring an ID and proof of employment. More often than not, even when you don’t have an amazing credit score, you will get your loans approved with only these documents.
Yes, You Don’t Need an Amazing Credit Score
Payday lenders understand that it’s hard to get a loan from a bank if your credit score is subprime. This makes applying for a payday loan the best choice for people who have zero credit visibility.
All you need to bring with you when applying for a loan is any form of government issued identification, sometimes 2, and proof that you are able to sustain income. They do this in order to avoid funding a terrorist organization and to prove that you are able to pay back what you owe them.
Other times, they will require you to bring collateral if they deem that the loan you are asking for is too big for your current income.
Not only do they not mind your bad credit score, they also don’t mind if you have a bad credit history.
They Don’t Check Your Credit History
Even if you have a good credit score, some banks will still turn you away because they found your credit history to be unfavorable.
Your credit history depends on whether you’ve paid your past bills on time, and how long you took before you paid your last debt and how responsible you are in paying them. As you can see, it is hard to gain and maintain a good credit history if you have a bad credit score, and vice versa.
However, payday lenders can secure you payday loans with no credit check needed. You don’t need to worry about your past records when applying for a loan.
This also means that, if you combine the fact that you don’t need a good credit score and credit history, you are more likely to get approved when you apply for a payday loan.
Who Else Uses These Loans?
Contrary to popular belief, minorities and single parents are not the only people who use these loans. Aside from those who have a bad credit score and credit history as mentioned above, a lot of people, in fact, have taken to applying for a payday loan whenever they are in need of one.
Working students apply for a payday loan if they find that they’re in sudden need or some cash that their paycheck can’t cover at the moment. As well as some renters who’ve had trouble making rent.
People who have a low annual income rate apply for a payday loan. Along with the most common borrowers, people who have no credit card or savings account.
While it’s true that most of these people can get a small personal loan online instead, there is no guarantee that they will get approved. Furthermore, they may need the cash as soon as possible. In the event that they do get approved, the terms of the bank often make it hard for them to pay it back.
This tends to lead to their loan being one of the 1.22% of non-preforming loans and the defaulting of their account.
Pros of Applying for a Payday Loan
There are many pros you can get when you’re applying for a payday loan, first of which is you get to start building your credit score. This will also get you on track for improving your credit history. This is the main reason why people apply for a payday loan first.
If you are in dire need of cash as soon as possible, payday lenders can get you a secured loan on the same day as your application, which is why these loans are also called “same day loans.”
Also, as soon as you start building your credit score, you can start to borrow larger and larger amounts of money.
And speaking of your credit score, because of the 2-week time period a payday loan has, your score has protection from deterioration. For when you apply for an installment loan with the usual 2-year time period, anything can happen to your finances within the allotted time span.
Unlike certain bank policies, you have no penalties for paying the entire amount of your loan earlier.
And you will also get protection from debt with your loans, assuming of course, that you pay your loan before your deadline expires.
Cons of Applying for a Payday Loan
Along with the many pros of payday lending comes the cons. The biggest one, however, is the increase in interest rate.
A payday loan gets an increase of 400% and sometimes up to 1000% if it is not paid within the agreed upon time period. Making it harder for you to pay it back in full. In turn, this can add to the country’s $14 trillion total debt.
Other than the increase in the annual percentage rate, there may also be fees added to your loan if you don’t manage to pay it in time. Fees like the extension fee, which allows you to avoid the exponential growth in the interest rate for a limited time.
Another fee which you can get charged with during the event that you can’t pay on time is the late payment fee. The lenders add this fee along with the total amount when you will pay your entire due. If you’re late in your payment, you better bring along a lot of extra cash to cover all your expenses.
What Are Payday Loans For?
You should consider a payday loan as an emergency fund. If the need to cover an unexpected expense arise, payday loans can save you from a lot of worries. They will let you get your hands on some money if your next paycheck is still not due for a while.
You can use these loans to cover for medical bills, emergency car repair payments, and for when your due for rent.
Should I Apply for a Payday Loan?
That all depends on the situation you are in. If the expenses are urgent and needed as soon as possible, then you should apply for one. However, if what you desire is unnecessary for your health, home, or professional life, then it’s best that you don’t apply for one.
You should also take into consideration your income. Is what you’re earning going to be enough to pay for the loan and its interest? If you see that you can’t cover it within the agreed upon time period, you should consider other options like borrowing from a friend, lest you experience the exponential increase in interest rate and the additional fees.
Learn the Truth and Apply for a Payday Loan with No Credit Check Now
There’s the truth, payday loans have risks involved, but so do other means of getting a loan.
However, this guide should help you know what to do and what to look out for when you apply for a payday loan with no credit check.
Did you find our guide helpful? Then come and check out our website for other helpful guides. If you liked learning about no credit check payday loans, then you may find our post about no credit check financing interesting too!