Payday Loans

What Are The Advantages And Disadvantages Cash Advance No Credit Checks?

If you are considering borrowing cash advance no credit checks, you must be aware of its advantages as well as disadvantages. In general, the packaging for these loan programs is done so attractively that people tend to overlook the negative aspects associated with the same.

Advantage: Easier Than Borrowing A Conventional Loan

These loans are usually advertised as the most suitable financing option for those who face short-term cash flow problems.

There can be several conventional loan options also, such as personal loan, a credit union loan or even credit card advance, but some consumers, especially the ones with bad credit, find it almost impossible to qualify for a low-rate conventional loan. Even though there are sub prime lenders available out there and it is possible to borrow a loan at a much lower rate than the rate charged by cash advance no credit checks, most bad credit consumers still prefer to go with payday cash advances because of the simple and quick procedure. Borrowing a conventional loan usually requires the applicants to go through complex paperwork and it takes at least a week to get the loan application approved. On the other hand, payday loans are approved quickly and the borrower gets the money within 24 to 48 hours.

Advantage: Credit Checking Is Not Required

One of the most attractive feature of cash advance no credit checks is that your credit score is not checked by the lenders to determine your eligibility for the loan. Even if your credit score is zero, you can still have a chance to qualify for a payday cash advance as long as you meet other eligibility requirements that are very simple. In general, loans are approved on the basis of just two criteria – your employment status and whether you have a bank account in your name. Payday lenders often do not care about your residential status or other things that conventional lenders often look into before approving a loan application. However, the very basic criteria still remain the same, which means you must be at least eighteen years old and must also be a permanent citizen of the United States of America.

Disadvantage: Extremely Costly Financing Option With Unusually Very Short Repayment Period

The major drawback of cash advance no credit checks is that they generally charge anywhere from $15 to $30 as interest on every $100 of loan, which often sounds reasonable to the highly desperate loan seekers, but most of them never realize that the actual cost of this easy financing option is usually much higher than that. Lenders often do not disclose the hidden charges, such as in terms of processing fee, approval fee, fund transfer fee and others. These additional charges can amount to up to $30 or even more. This way, a $100 of payday cash advance typically requires you to pay back around up to $160.

The most important thing to note here is that the interest and other fees as mentioned above are charged for a 14-day period. It means you should expect to pay just double of the cost mentioned above if you are borrowing the loan for four weeks. This way, a $100 of cash advance no credit checks borrowed for four weeks typically requires you to pay back around $220, which is more than the double of the actual principal amount.

What is more, the situation becomes out of control when you miss the due date, which most borrowers often do because they fail to arrange enough fund to ensure timely repayment within such a short period of time. The nonpayment of cash advance no credit checks results in additional interest and penalty charges, which can be a substantial amount of money. If the payment is delayed by one month, you will find yourself in a serious debt trap, where you will be required to pay back several times the actual principal amount.

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