“I need cash but I Have a bad credit history, where can I apply for a loan? Can I get online loans with no credit check?”
One of the options available for people like you is an online payday loan. You can get instant cash, without credit investigation or checking your financial capacity to pay.
Unlike loans from banks and other financial institutions that check your financial history, getting loans in a payday lender doesn’t require this. Did you file for bankruptcy in the past, was unable to pay your credit card, or has an outstanding credit in your bank? These scenarios are not an issue at all if you’re applying for payday loans or cash advances.
Payday lenders don’t assess you for your credit score, so an unsettled credit will not be used against you. Since you have instant access to cash once approved, it means that you can manage your financial woes immediately. With these benefits, don’t forget that it comes with high-interest rates and fees.
Characteristics of Payday Loans:
- No Installment Plans
Unlike other loans that give you time to pay between 6 months and some years, this type of credit is payable only for one-time after two weeks. Yes, this is true.
This is a short-term loan. You get cash instantly, but you need to ensure that you’ll pay it back when it is due. Otherwise, it earns high-interest and fees that would make it hard for you to repay.
- Instant Cash
One thing that makes this loan different from the rest is that it offers instant cash. If you apply now, you are more likely to get it within the day. Some lenders take one to two days of processing.
Getting instant cash is a big help. If you are running out of budget to pay your credit card, utility bills, or there is a medical emergency, you can solve your problems right away. Addressing your issues immediately lowers the risk of incurring more problems.
- No credit check
That’s right. You don’t need to worry if you have a bad credit score. It wouldn’t affect your chance to take a loan. Payday lenders are popular to people with bad credit or have no credit score because it provides them the solution to their needs, without having to worry about their credit standing.
Loans are almost guaranteed as long as you submit their minimal requirements. Lenders do not care about your past credit because they are only looking at your capacity to pay the loan on time.
Lenders ask for minimum requirements including:
- At least 18 years of age.
- Bank account.
- Proof of income.
What are the drawbacks of taking the loan?
If you are an employee who is living paycheck-to-paycheck, no savings, has a bad credit score, and in need of instant cash, taking a cash advance can be your option. However, you need to keep in mind that it comes with such hefty fees.
To ensure that lenders can minimize loss, they ask for a high annual percentage rate (APR). Payday loans have 400 percent APR. This is a very huge amount when computed that it is sometimes very hard to pay your loan.
If you can’t repay it on time, the APR continues to grow. This is the reason why most borrowers go for a rollover. You roll over when you pay charges because you are unable to pay your loan on time, according to CFPB.
Rollover isn’t available in most states. It is banned in a few areas.
Sadly, studies revealed that most borrowers are unable to pay their payday loans. Most borrowers re-borrow or rollover their loans instead of paying it in full. The main reason here is the high fees and interest.
In some cases, they resort to borrowing from family and friends, apply for another loan, or pawn their personal belongings in order to settle their loans.
About 12 million Americans use this short-term loan per year. But despite the disadvantages, many are still using it to cover their bills and emergency expenses. If they have other options in the market that offer instant cash like these lenders, maybe borrowers aren’t going to take the risk.