What you need to know about payday loans with no credit check
In our lives, we all try to plan things ahead. Most of the time, budgeting for your expected earnings and expenses will be enough to keep you financially stable. However, there is always the possibility of something unexpected cropping which you may need financial assistance with. It can be an unexpected medical bill or your car breaks down and the repair fee comes up to a substantial amount. Whatever the emergency is, you may likely need to take out a loan in situations like these. This is where your credit score comes into play.
Why does your credit score matter?
Traditional lending institutions check your credit score to see your credit history is. It allows lending companies to make a quick assumption about your creditworthiness. Whether your credit score is good or bad can pretty much determine your options for financial assistance. Even though many people have good credit scores, there are still many others who have credit scores that are far from good. The bad news for people with bad credit scores is that applying for a loan with a traditional lending institution like a bank can be almost hopeless. The good news is that the bank is not their only borrowing option. There is a type of short-term loan designed especially for people who are in need of financial assistance and have nowhere to get it. We are talking about payday loans.
What Is a Payday Loan?
Payday loans are one of the most popular ways to get some money without no credit check. Despite their rather bad reputation, payday loans with no credit check actually help lots of people who are in difficult financial situations. Payday loans give them quick access to cash and enabling them to take care of their urgent bills. By nature, payday loans are short-term and should be used only for emergencies. With no credit check payday loans, you can usually get up to $500 which you must repay by your next paycheck. You will also need to pay the interest and any fees that come with the loan. This is why, if you decide to take out a payday loan, you have to be sure that you are able to repay it on time. Otherwise, you risk making your financial situation worse. It is of great importance that you do not fall into a loan cycle where you take out loan after loan to take care of the previous one.
For borrowers with poor credit score, the risk of taking out a payday loan sometimes outweighs the benefits they get from getting one.
Benefits of Payday loans no credit check
They are fast
After providing the required information, which is not a lot, you will be approved by your payday loan lender almost instantly. The process of applying for a payday loan is very fast and easy. Unlike with traditional lending institutions, when taking out a payday loan, there is no need for you to fill out any unnecessary forms. Once you are approved for your loan, it usually takes only a few hours for you to have the loan money in your pocket. In a worst case scenario, you may only have to wait one business day to get the loan money.
Lending companies try to be as fast as they possibly can when granting your loan so as to remain competitive. The lending business is a very big industry and the number of payday loan lenders is growing really fast. This is great for the borrowers, especially in emergencies where they cannot afford to wait for days or weeks to be approved of a loan. When applying for a payday loan, you get an instant response for your loan application and that response is positive most of the time.
They are convenient
When applying for a payday loan, you have the option of applying it online from the comfort of your home. You don’t need to drive around, schedule meetings or make several calls to lenders to submit your application. When getting a loan from a traditional lending institution, you need to have a number of meetings with your lender. That is not the case with payday loans. When you compare payday loans to credit cards, payday loans have the advantage of getting you the loan you desire in cash. While you have certain limitations when using the money from a credit card, you have total freedom in what you want to do with your payday loan. For example, you can pay for your car repair or electricity bill.
Payday loans give you the freedom to use the money in whichever way you desire. The case with traditional banks is quite different as they need you to specify exactly what you intend to do with the loan before they even grant you one.
When applying for a payday loan with no credit check, the paperwork involved in the process is very little. In some cases, there is no faxing at all as you don’t even have to send any documents as you apply online. Still, if a lender requires you to send a proof of your income, faxing the documents will take no more than a few minutes.
You don’t have to meet a lot of eligibility requirements
Getting a payday loan is quite easy as you only need to meet some basic requirements. The thing that matters most to payday loan lenders is whether you have a steady source of income or not. As long as you meet this requirement, you should have no problem with getting the loan you need. Traditional lending institutions usually require a collateral for the loan. With payday loans, there is no collateral required. Having a steady source of income is all that is needed for payday loan lending companies to grant you a loan. Other requirements may include you to have an active checking account and be a permanent resident of the state where you submit your application. Another basic requirement to get a payday loan is to be 18 years old or older.
Here’s the main advantage of payday loans no credit check – you are not required to have a good credit score. Unlike with traditional banks where having a bad credit can basically put an end to your hopes of getting a loan, with payday loans, having a bad credit is almost irrelevant. That is due to the fact that payday loan lending companies is only concerned with whether you have a steady source of income. In other words, what they need to know is whether you will be able to repay your loan or not. They do not care about your credit history. With payday loans, you are free from the financial mistakes of your past. Simply show the lending company that you have a steady income and will be able to repay the payday loan when you receive your next paycheck.
Qualifying for a higher loan amount is possible
Most payday loan lending companies limit the amount a borrower can borrow when granting the payday loan. Borrowers usually have access to an amount of money that fits comfortably into their salary range. Once you have repaid your first payday loan on time, your payday loan lender may increase the maximum loan amount limit for your next loan. Let’s say you have taken out a $500 payday loan which you have repaid on time. When you submit an application for another loan with the same lender, that lender may increase the amount you are allowed to take up to $1,000 depending on its lending policy.
Usually, the limitations that lenders set on maximum and minimum loan amounts depend on the payday laws of the state they are operating in. You will be informed of the maximum amount during your loan application process. Establishing a good relationship with your lender always makes things easier, so it is in your best interest to repay your loans on time.
Payday loans with no credit check could be the best, and usually the only choice for borrowers with poor credit scores. However, when taking out a payday loan, you should still be careful and make sure that you can repay it on time so you don’t end up in an even worse financial situation.