Payday Loans

Can I Qualify For Online Payday Cash Advances Even If I Do Not Have A Regular Monthly Income?

In general, the answer should be no. Many payday loan companies approve applications for online payday cash advances from only those individuals who earn a fixed amount of monthly salary. But, as a matter of fact, it is not always necessary to be a salaried individual to qualify for these small, short-term loan programs. Even if you are unemployed but have a regular monthly income, your application for these loans is still very much likely to be approved. However, since you do not even have a regular monthly income, many lenders will consider you as a high-risk applicant. But, there are still many internet payday loan providers out there that will be more than willing to offer you a cash advance; your employment or earning history will be a very important factor in this regard. If you do not have a regular monthly income, it does not mean that you are earning anything at all; it probably means that you are a self-employed professional and that your actual earnings vary from one month to another. Following is a detailed overview on some of the important aspects associated with this situation that you must be well aware of.

Payday Loans Are Unsecured Loans, But Your Monthly Income Is Considered As A Security Against The Loan

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When it comes to borrowing online payday cash advances while you have irregular monthly income, the first thing that is very important for you to understand that despite the very fact that lenders advertise these types of loans as unsecured loan programs, they always look for security, such as in term of a regular monthly pay check. Since you do not have a fixed monthly income and that you do not get a regular monthly paycheck, you may have some trouble in finding a payday lender for you. But, if you shop around thoroughly, you will be surprised to see that there are many payday loan companies (especially in the online market) that issue payday loans to even those who do not have any income at all. They do not even check the credit scores or credit history of the applicants. Payday loans are being issued to even those individuals who have bad credit and do not have sufficient income to afford timely repayment. Yes, this sounds too good to be true, but it is a fact. Now, you must be wondering why lenders take that risk. The answer is explained below.

Understand How Payday Lenders Make Most Of Their Money

In order to solve the puzzle why online payday cash advances are available to almost everyone (even for bad credit individuals and even for those who are not employed at all), you must first understand how payday loan companies make most of their money. You will have to look at the entire mechanism, right from the very beginning.

First of all, payday lenders do some aggressive advertising about their cash advance programs that how these loans can be beneficial for everybody and why these loans make the best financial decision. They usually do this by explaining some lucrative features of online payday cash advances, such as easy application process, no paperwork, no faxing of documents, no verification, no credit checking, instant approval and quick access to the borrowed money. The hidden catch here is that these lenders seldom talk about the extremely high amount of interest and other charges that these loans charge from borrowers. It is very important for you to keep in mind that most payday loans come with an APR (annual percentage rate) of somewhere around 200% per annum to $750% per annum.

In order to make timely repayment more difficult for the borrowers, the repayment period is kept very short, usually ranging from 7 days to 28 days. As you can see, the cost of payday lending is extremely high and the time given to arrange the fund to repay the loan is very short. Because of the lucrative features of online payday cash advances that are advertised heavily by payday lenders, consumers get tempted to borrow these loans, but because of the high cost of lending and very short repayment period, the majority of borrowers fail to make timely repayment. When this happens, the loan account is either renewed or the repayment period is extended to 30 more days. This sounds like a favor from the lenders that they are allowing more time for the borrowers to make the repayment, but in reality, this is a serious debt trap. Lenders charge interest at the same high rate for 30 more days (the penalty charges are additional), which eventually makes the repayment almost impossible for most of the borrowers. Many of them are even encouraged to borrow another “easy” payday cash advance so that they can repay their existing payday debt, which pushes them into a much deeper ocean of debt.

In short, as we can see, payday loan companies that offer online payday cash advances make the most of their money through those borrowers who do not have the financial capability to afford timely repayment. Such borrowers eventually become a regular source of income for payday lenders. For every $100 of loan issued to such borrowers, lenders end up making over $1000 in the entire process.

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