Payday Loans

The Negative Sides Of No Credit Check Payday Loans

If you are considering borrowing no credit check payday loans, there are several important factors that you must take into your careful consideration. In the first instance these fast and easy mini-loans do look like a very lucrative financing option, as they can provide you instant cash as and when you need it. These are small amount of loans that are issued for a very short period of time. You must repay these loans on the next payday, which means the repayment period can be as short as one week to four weeks. The most attractive thing about these loans is that they are available to everybody, including those who are struggling with poor or bad credit. The lenders never look into your credit score to determine your eligibility. But, despite all these attractive features, these loans also have a very serious negative side, which you must be well aware of. Following is a brief rundown on it.

You Can Be Charged Over $50 (Or Even More) For Every $100 You Borrow

The worst thing about no credit check payday loans is that they come with hefty amount finance charges and a very high rate of interest. For every $100 of loan that you borrow for a 14-day period, you may have to pay $50 or more in the form of interest and processing fee. The situation is very much under control in 16 states where either payday lending is banned or low rate cap applies. In the remaining states, the situation is as horrible as explained above, that too, despite the very fact that even those states have enacted certain payday loan laws. Therefore, if you are okay with it and are 100% of your financial ability that you can afford to pay back over $150 for every $100 you are borrowing, you can go ahead and file an online application for the same. But, before you do that, you may like to read some provisions that payday loan lenders follow on nonpayment of the debt.

Nonpayment Of The Debt On The Due Date Result In Hefty Penalty Charges With Additional Interest

If you fail to make the repayment for no credit check payday loans on the set due date, you are charged with hefty penalty charges. Most of the lenders send the same check again and again for collections, which result in multiple collection fee charged by both your lenders as well as by your bank. Besides that, you also become liable to pay additional interest for everyday you are delaying in the repayment. Considering the very fact that the rate of interest is very high, the outstanding debt balance keeps on multiplying very fast. For example, if you are charged $50 for every $100 issued for a 14-day period and there is a further 14 days of delay, you will be charged $100 just in the form of interest (the penalty charges are additional). As you can see, missing the due date because of any reason can result in your debt getting more than double within just a couple of weeks.

Now that you are well aware of the negative side of no credit check payday loans, you will have to be very careful with your decision. Go for it only if you can make the repayment in a timely manner. However, the best thing is that you should always avoid these risky loans and look out for better alternatives. The alternatives abound; you can explore a wealth of resources for the same by visiting the section “Payday loan alternatives” on this blog.

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