Payday loans go online – without credit check

Payday Loans – no credit check

A payday loan, as the name suggests, is a payday advance or a salary loan. An unsecured loan, it is a small, short term one. Think of it as a cash advance. Also popularly known as payroll loan, short term loan or small dollar loan, these loans require checking of earlier records of employment and payroll. Different states and cities have different policies concerning payday loans. To minimize the chances of charging a very high rate of interest, the APR or the annual percentage rate is monitored and set by certain jurisdictions, so that payday lenders do not charge exorbitantly. Depending on the restrictions and laws imposed on payday lenders, the rates offered vary, with an average of thirty six to forty percent. Just as there are many ways of calculating the APR, the rates calculated may differ.



Where there is a loan, there has to be some risk involved! The risk involved is the same amount involved during the lending and borrowing of any other form of credit. The only risk here is the borrower’s background. Some lenders thus check the employment as well as income proof and backing of the borrower. If the borrower still defaults, the loan amount with high fee or very high rates of interest are charged after completion of the due date. What is a payday loan with credit check involved?! Since these loans are short term and are given by a lender as an unsecured loan, the borrower has to repay it during the next payday. This wards away the need for credit checks. However, some lenders feel the need to verify the income or employment of the borrower. But that rarely happens. How does the process work? Many places have a payday lending store where borrowers take the loan from lenders. In return, they hand over a post dated cheque inclusive of the loan amount and fee. At the end of the term, the borrower walks back to the store in person to repay the borrowed amount. There could be cases wherein the borrower is unable to reach the store personally. At such instances, the lender redeems the cheque. The golden question is what happens if the cheque bounces? Simple, the borrower will have to pay the bounced cheque fee plus loan amount and at times an increased interest rate or increased fee amount.

Risks?

In the present day where everything happens on the internet, the payday portal has also gone online. An option to fill in an online loan application form is now available. Fax is another alternative, especially in cases involving documentation. The loan amount is transferred to the borrower’s account. On the next payday, the finance charge is withdrawn electronically. Who and why? Why would anyone need a payday loan? Who are they? Well, anyone at a given point of time could need a payday loan, depending on their current financial situation and financial crisis. However, the trend suggests a particular set of people to be the most common subjects of payday loans – youngsters without a college degree, people renting homes, Afro-Americans and of course those who earn less than forty thousand dollars annually, people who are separated or divorced, recent immigrants, single parents etc. The trend: On an average, a payday loan borrower signs up for such a loan just to take care of his or her day to day expenses and other recurrent expenses and definitely not for some emergency situation. He is generally indebted for around five months in a year. All about the pay: Payday loans are convenient forms of unsecured loans lend for short term. At the same time, they are very good options for people with bad credit history. The best part of lending and borrowing these loans is that there are no credit checks involved, no documentation and at times no background check as well. These loans are given very quickly and at relatively cheaper rates of interest. It deals with direct deposits and involves low fees.