No Credit Check Payday Loans: How to Validate Borrowers Information
Sometimes, financial problems will make you feel hopeless. Although there are some options that you might consider to overcome these challenges and build a better future (financial) for your family and yourself. First, you must have an idea about no credit check payday loans. These types of loans don’t use solid inquiries from outdated credit bureaus. These can help you to meet your necessities without affecting your credit worthiness (credit score).
What is payday loan without credit check
Normally, payday loans allow you to borrow a small amount of money for emergency payments like healthcare and car repairs. Borrowed money from payday loans must be return once you receive your salary or else the interest rate will increase. However, some payday loan lenders promote “no credit check.” Honestly, this is confusing, since several lenders do not perform credit checks. However, other lenders still perform basic check, which includes your credit score and checking financial account from other sources. Fortunately, basic check won’t affect your credit rating and only visible to you. On the other hand, payday loans (traditional) perform hard check, and this can affect your credit rating.
How does it works?
Applying for a payday loan without credit check is very easy and quick. Visit lender’s company, sign up the application form and after which they will release your money. In addition, proof of income such as paycheck stub and bank statement should be presented to the lenders. People are applying for payday loans since they can acquire the cash easily and in return they are required to pay for the interest. Thus, instead of paying their other bills they are giving extra cash to the lender.
How payday lenders validate borrower’s information?
Yes, payday lenders offer loan without credit check, but how can they verify borrower’s information? Every lender uses different approach in verifying information. Other agencies also provide them necessary information which helps them to decide if they will approve the borrower’s application. These agencies inform the lender about social security system number, valid bank accounts and other list of checks. Through online, these agencies will verify these information in just a few seconds.
Payday Loan without credit check might be the correct choice
Many lenders do not perform straight credit check since, they are not showing up credit report. Online payday loan lenders collect information from other sources to validate your capability to pay. Compared to other type of loans, payday loans (online) allows the borrowers to secure their funds easily.
On the other hand, always remember that you need to borrow funds responsibly and payday loans must be used for basic needs. Use your full effort to solve your financial problems before applying for payday loans. Even though payday loan lenders offer payday loans with low-cost, the interest rate is still expensive. Online payday loans are the best choice to solve financial problems and most importantly, borrow only how much you need.
Payday loan lenders tricks
In exchange of easy and quick loans, many lenders are making traps that is why borrowers faces more financial problems. Here are the following.
- Unaffordable interest rate
At first, lenders fee might appear reasonable. For instance, every 100 dollars will have a 30 dollars interest rate, and the borrower might think this is not expensive, but then this interest rate is equivalent to 782.15 percent APR. Unfortunately, these rates make debtors in debt.
Sometimes, payday lenders setup automatic payments using the borrower’s account. If the lender attempt to withdraw payments using borrower’s account, the borrower will face unreasonable bank charges. On average, the borrower would have penalty fee of 185 dollars if the lender failed to withdraw payment.
- Termination of bank account
If bank accounts retains a zero balance for a long period of time, there is a possibility that the bank will automatically terminate your account. That is why many people are looking for debit cards with high fees, because they will not entertained by regular banks.
If the borrower failed to pay the money on the given time, payday lender would allow the borrower to apply for another loan with additional fees. This is the main reason why refinancing is prohibited in many country.
Advantages of No Credit Check
Aside from disadvantages, no credit check also have several advantages including
- No collateral needed
- Easy and fast application process
- Easily available and
- Borrowers personal information/details are not retrieved
- Cash were being transferred within 15 minutes
- Pay your loan for more than three months
- Instant online approval.
Why Credit Checking matter?
Borrowers should understand that checking credit is important. Generally, every time a financial institution or lender check your credit, there is a possibility that your credit score will be affected. Many financial institutions and traditional lenders perform hard check especially when they are reviewing borrower’s credit. Meaning they are judging the borrower’s credit report, score and history in order to determine how much money they will lend to them. Thus, why hard check affect your credit?
Several numbers of hard checks in just a short period of time are frequently understood that you are anxious for money. This will look like you are either mishandling your money or you are trying to accumulate more fees without paying your previous loan.
But if you want fast cash, it means that your concern is to get cash now. Fast cash don’t require hard checks and it will not affect your credit rating. In these situations, you only need a payday loan without credit check. But be cautious, because this loan has different types, some of them is safe but many of them are not.
Applying a loan from banks or other financial institution will be difficult, especially if the borrower has bad credit score. That is why, payday loan without credit check is very attractive. Although there are several things to consider before making your final decision.