Posts Tagged ‘myth about payday loans’

2 Common Misconceptions About Payday No Credit Check Loans

Payday no credit check loans look like a very attractive financing option to those low-income consumers whose credit history is not good enough to allow them to qualify for conventional lending programs. As the term suggests, lenders offering such loans do not check your credit score at all. They do not even ask you to put something as collateral against the money you are borrowing. As long as you have a decent employment record with a checking bank account where your salary gets credited every month, they consider you as an eligible applicant. In general, there is no catch about ‘no credit checking’; they mean it when they say they don’t check your credit score. But, there are certain misconceptions about these types of loans that you must be aware of.

Lenders Do Not Verify The Details You Provide In Your Application

Payday non credit check loans are often also advertised using various other terms, such as no verification payday loans, fax less payday loans, paperless payday loans and others. Always remember, though your credit report is not checked, your Teletrack report is. Many people have an assumption that the three major credit bureaus (Experian, TransUnion and Equifax) are the only ones that keep track of their financial activities. As a mater of fact, there are lots of unconventional credit agencies other than these three major ones that maintain records of how you are dealing with your debts and finances. Teletrack is one of them. It is the most popular among those small agencies and its services are mostly used by payday lenders, retail stores and others. Payday loan companies look into your Teletrack report to get an idea about how much capable you are to make the repayment in time. Besides that, they also use other services of Teletrack, which include the verification of the information you provide in your loan application. Teletrack does it on behalf of your lender.

Payday No Credit Check Loans Are Easier And Cheaper Than

The Bad Credit Loan Programs Offered By Conventional Subprime Lenders

Another common misconception about payday no credit check loans is that the bad credit loans that many conventional subprime lenders offer are more difficult to qualify for and are also more expensive as compared to payday lending. This is not true at all. In comparison to all other forms of conventional or unconventional loans, payday loans are the most expensive

ones. Even pawn loans that have a very bad reputation about charging huge interest rates and are often termed as predatory lending are cheaper than payday loans. The maximum interest rate they charge is never more than 300% per annum, but in case of payday loans, the interest rates start from 300% per annum and can go even over 1000% per annum. In fact, there are a few states where it is completely legal to issue payday loans at an annual percentage rate of 1960% per annum.

Overall, payday no credit check loans can never make a wise financial decision, as they are unreasonably so costly that it is almost an impossible task for people with low income to pay it back in time.

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