What Is An Online No Fax Payday Loan And Who Are Eligible To Borrow It?
As the term suggests, an online no fax payday loan is a short-term cash advance program that does not require you to go through any paper work; no faxing of any documents is needed. You can simply visit the website of the lender and fill out an online application form. The information you are required to provide include your name address, age, citizenship, details about your employment history and your checking bank account number. In general they do not even require you to give them a post dated check as security against the loan. Instead, they prefer to withdraw fund directly from your bank account on the set due date. They claim to use this repayment method to make things convenient and easy for the borrowers. But, it is very important for you to keep in mind that the lenders that offer this type of loan, where they do not even care to verify the details provided by you, may try to take undue advantage of your vulnerable financial situation. Therefore, you have to be very careful with your decision while you are considering borrowing this loan. Following is a brief rundown on the basic qualifying criteria for a no faxing online payday loan and whether it makes sense to borrow such cash advances.
Basic Qualifying Criteria
The basic eligibility criteria to borrow an online no fax payday loan are very simple. You are only required to authorize your lender to deduct the repayment amount from your checking or saving bank account on the set due date. There are practically no other important criteria to fulfill. It means almost anybody can qualify for these short-term loan programs provided they have a bank account in their name, where a certain amount of regular income is credited every month. Lenders do not even care to check your credit score. Even people with bad credit can borrow these loans very easily.
The Absence Of Verification Process
As we can see, an online no fax payday loan seems to be a very easy and fast lending program, where your loan gets approved within minutes and the money is transferred to your bank account the same day. It is a completely paperless process. The reason why these lenders do not go through any verification process is simple – they want to attract (read trap) more and more customers. There are thousands of Americans out there whose monthly income is very limited, and more often than not, they have to face cash crunch when an unexpected financial emergency hits them. In a situation like this, they feel tempted to accept any offer that promises them instant money. These lenders try to take advantage of this temptation.
What Are The Risks?
It is unfortunate but true that the majority of lenders that offer online no fax payday loan programs are unscrupulous one. Even the Federal Trade Commission (FTC) has warned consumers against these types of ‘no verification’ lending programs. The FTC has even termed the practice of issuing this type of loan as predatory lending.
The risk factors abound. It is not just about the high rate of interest that lenders charge on these loans. Though that is true, the more serious issue is identity theft, which is very much likely in such cases. Most lenders ask you to provide confidential details about your identity and finances in the online application form. For example, many of them even ask you to provide your bank account password so that they can withdraw fund from your account, claiming that they are highly reputable lenders and that they will never attempt any fraud and that they are doing this just to make sure you do not have to go through any hassle. Some online no fax payday loan lender may even ask you to provide your credit card details and social security number. When you are in an urgent need of instant cash and someone is offering exactly that to you, you sometimes do not think much and do some very silly mistakes that eventually costs you a lot. You are strongly recommended not to provide such confidential details to anyone. If you come across a lender that asks for such details, you should consider it as a huge red flag.
What If The Lender Is Truly A Genuine One?
Even if you are lucky enough to find a truly genuine online no fax payday loan lender, you are still advised to avoid these payday cash advances, as they are the most expensive and riskiest way to borrow money. After all, does it make sense to repay over $150 for every $100 you borrow? If it makes sense to you, go for it, but you should still consider another factor, which is about automatic renewal of loan once you fail to repay the loan on its set due date. In such cases, you are charged additional interest at the same high rate along with hefty amount of penalty charges for every single day of delay. The outstanding debt balance grows very fast. If you are late by one month, you are very much likely to liable to repay more than double of the principal amount of money you had initially borrowed.
Overall, though an online no fax payday loan looks like a very attractive option to borrow instant money, it never makes the best financial decision, especially when there are so many better alternatives available out there. You can read about some very practical and effective alternatives by visiting the section ‘payday loan alternatives’ in the ‘payday loan’ category on this blog.