A payday loan, as reflected by its name, is a short-term loan that is based on a borrower’s actual salary from paycheck to paycheck. The lender typically holds the post-dated check payments for future deposit or has electronic access to the person’s bank account to ensure that schedules are met. When one’s salary arrives, the borrower is expected to pay the loan plus the charges and fees in one lump sum.
The amount for payday loans are small and they are originally designed to help tide people over until the next payday. In some instances, these loans are used to fund a medical emergency, a mortgage or rent fee, a utility bill, and a variety of unexpected expenses like car or home repairs. The usual payday loan does not exceed $1,000. This is to ensure that the borrower is realistically able to pay the loan after two weeks or one month.
No Credit Check Online Loans
Perhaps the best thing about most payday loans is that lenders generally do not mind if you have a negative credit score. Whether you have an empty credit history or were in the red before, what matters is you ability to pay back the loan now.
This is why a huge part of the decision of your application’s approval lies on your proof of income. You have to show that you are a regular employee who receives a fixed salary every two weeks or every month. If you are not employed but have a business, your bank statement should show that you are receiving a minimum acceptable income periodically.
As long as your current income makes you able to meet your payment commitment to the payday loan provider, there should be no problem. You can even get an online loan the same day you apply. Other typical requirements to qualify and get approval for a no credit check loan include a national government issued ID, an active checking account or a bank account with an electronic debit feature, and a proof of billing.
No credit check payday loans are allowed because they are not anchored in your past. They are dependent on your ability to pay and the lender’s ability to collect. By holding on to your checks or getting access to your bank account, they are guaranteed to receive payment when your salary arrives. This is why they can afford to release payday loans online same day.
You can reapply for a payday loan in the future and keep renewing as you need it. Over time, when you have established a good credit standing with the loan provider, you might be allowed to borrow a bigger amount and for a longer repayment period. If you are using a payday loan to clear up your bad credit history, this is a great chance to do so.