Everyone seems to want and like no credit check payday loans. What everyone likes about no credit check payday loans is that past credit history has no impact upon whether or not the loan is approved. It is an excellent option for credit challenged persons or those with a poor or no credit history. Several items are required for everyone wanting to get a cash advance, including an active bank account, a pay stub or other proof of income on a regular basis, and they must be of adult age.
Why are Payday Loan Rates High
It is important to understand that the payday loan industry does not have to meet government regulations that apply to banks, credit unions and other financial institutions. Unlike those regulated businesses, the payday loan industry is allowed to charge interest rates that are extremely high. This frequently does not matter at all to someone who needs emergency cash on the spot. Car repairs, medical service and other business expenses must be paid immediately. If a person lacks sufficient cash on hand, they must borrow the cash. For this convenience, the payday loan stores exist, on land and on the Internet.
Who Can Get a No Credit Check Payday Loan
With no credit check payday loans, almost anyone can get a loan if they are willing to pay high interest rates, from 400% and upwards to the thousands if calculated on an annual APR basis. Typical interest fees for a $100 loan are $15 to $25. If cash is needed quickly, that amount in fees does not deter the borrower from making a deal to borrow the cash. The loans are only taken for a time period until the next pay date, from a week to a month out, depending on the income source.
Even though there is no credit check, the industry maintains its own check system to week out people who are non-payers. If the system shows a previous payday loan default, that person will be denied. Some systems will also refuse a borrower who previously had to set up a payment plan to pay off their payday loan. Remember, these loans are high risk, to people who have little or no credit worthiness on record. The high interest rates and any denials help to minimize lender risk so they can continue to offer this service to others.
Why Are No Credit Check Payday Loans Popular
No credit check payday loans are popular and this industry is thriving. Just look all around the neighborhood and count the stores that offer cash advances. Online lenders are multiplying and they can provide loans 24/7 around the clock. Millions of people get these payday loans each day, and some find they must continue to “roll forward” their loans over several loan periods until they can finally pay it all off. All the while, the interest fees mount with each renewal. The end cost could be double or more of the original loan amount.
People who are poor money managers, a person who just lost their job, or those who are unable to make their payday reach to the next pay date rely on no credit check payday loans for survival. This can become a trap that is hard to get out of, but not impossible. The government has stepped in to determine in some states how many cash advance loans a person may have out at any one time, usually two or three.
Are Payday Loans Good Loans
No credit check payday loans are a money maker for the lenders. Large banks and others do not do this type of loan because of government restrictions that would make these loans very unprofitable. Smaller payday lenders are not restricted in the same manner; they charge much higher rates and they make a lot of money doing so. Those persons who have used payday loans generally will do it again as needed and they are happy the service is available to anyone. Only the borrower can determine if borrowing and their emergency are worth the excessive fees and interest charged. Perhaps a better option than getting no credit check payday loans for these borrowers is to earn more income, improve their credit record so they can get low rate loans, and learn how to better manage their money.