For several problems, no credit check loans could be the perfect solution. Your car has just broken down or there is another emergency you need to sort out quickly such as a sickness? Or maybe, you just need cash to take you through to the next payday. What should you do? The last time you’ve checked, your credit score was not quite appealing to most financial institutions. When you think of borrowing from friends and relatives, the idea is also not attractive. If you find yourself in this dilemma, there is hope. Payday loan lenders, with their no credit check loans, are there to save the day.
Why Payday Loans?
It is easy to apply for a loan – You can do this online.
The approval process is fast – It is possible to apply for the loan, have it approved and the money disbursed in less than 24 hours.
The credit score does not determine your qualification for the loan – Which makes it a good option for those with bad credit history,
They are often paid within the same day.
The qualifications are fewer than those for banks and other lending institutions:
- To be a citizen or be in the country legally
- To be over 18 years old
- Have a stable source of income
- Have a bank account
- Have valid identification documents
Why Payday Loans if You Have a Bad Credit History?
When you fall short of loan repayment, this can adversely affect your credit score. Any lender can access your loan repayments history when they check your credit score, particularly if it’s a bad credit loan. This means that a past fault can still affect your present chances of accessing some lending institutions even when you have a stable and reliable source of income. Banks, for instance, may not qualify you for a loan based on your poor credit score. Payday loan lenders are mostly interested in your current ability to pay a loan. They do not check your credit history but will be interested in acquiring information on your current employment status.
Isn’t a No Credit Check Policy a Big Risk for Payday Loan Lenders?
A credit check shows the information on loans acquired and the repayment process for a number of years. To some point is not relevant to payday loan lenders because the loan is only bestowed against your paycheck. This means that the loan repayments installments are automatically deducted from your next paycheck. How you faired on in the past does not necessarily determine how eligible you currently are for a payday loan.
Can a Payday Loan Affect Your Credit Score?
Yes, it can. You can either build or negatively affect your credit score with a payday loan. A payday loan is considered as a personal loan by the Australian Securities and Investments Commission (ASIC) meaning that all the transactions concerning a loan from a registered lender are submitted and visible in the overall credit history. Other lenders will be able to view this history.
If you maintain the loan repayment schedule and settling all the required installments on time, it will improve your credit score. When you successfully repay the payday loan, it is also indicated on the credit history.
Faltering can bring your score down. Have you realized that you might not meet a loan repayment deadline? You should contact the lender immediately, explain your situation, and request an extension. Do not wait for the lender to contact a court of law on the issue, this may ruin your credit score.
Payday Loan Lenders Can Still Check Your Credit History
Your credit score may not be important but the lender may want to check the credit history, that’s why lenders offer bad credit loans. The rules and regulations set forth by the Australian Securities and Investments Commission declare that an individual can only have one personal loan at a time. Lenders may want to ascertain that you do not have another payday loan that has not yet been repaid successfully.
What Information is Available on your Credit History?
All the Approved Loans: When a loan is approved, this will show on the credit history including the amount.
How Often You Apply for Loans: This too will show on the credit history; therefore, it is important you apply for a loan when it is absolutely necessary. When the frequency is high, it might not paint the right picture for the lenders.
Amounts Loaned: For every successful loan disbursement, the amount loaned appears in the credit history including the interest charged.
Terms of loan repayment: This may include the amounts to be paid and the schedule. Note that when you default, this will also indicate on the history. Additional charges, fines, and penalties will also be visible. Late repayment of loans may accrue penalties or extension fees which will reflect on the credit report.
Not Checking the Credit Score Accelerates the Loan Approval Time
When institutions have to go through your credit history to determine whether you are eligible for a loan, more time is required. The qualification process may take more days than when the credit score is not playing an active role in determining your eligibility. This is one of the reasons that make payday loans faster to approve. Most get approved within 24 hours after the application process has been successful.
It also means that applying for the loan online is easier because there are fewer documents to submit. In most cases, you only fill in an application form, then submit scanned copies of your identification documents, and then wait for the approval process. You can go through the loan application process in less than 30 minutes.
When you have a bad credit history or you want fast cash, a payday loan can be an ideal choice. It is also suitable for those who do not want to go through the process of filling and submitting many documents to a bank before the loan can be approved. Also, when you just want a small cash advance of up to $2000, consider payday lenders because some institutions may not want to loan such small amounts of money.