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Payday Loans, Payroll Advance - No credit needed:
The Pros and Cons
by rebuildcreditscores.com
The Pros and Cons
by rebuildcreditscores.com
The lender will advance
the borrower loan funds
and the borrower will
write a personal check
drawn on their bank
account for the amount
of the loan, plus the fees.
Your check will be
automatically deposited
at a later date, usually 2
to 4 weeks from the date
of the loan or your next
pay date.
the borrower loan funds
and the borrower will
write a personal check
drawn on their bank
account for the amount
of the loan, plus the fees.
Your check will be
automatically deposited
at a later date, usually 2
to 4 weeks from the date
of the loan or your next
pay date.
Some lenders will allow you to extend repayment of the loan for an
additional fee.
Loan Amounts
A Payday loan may be from $100 to $1,500, it varies from state to state.
The tremendous growth of payday loans has caused many states to
regulate the industry. Specific laws now regulate the payday loan industry.
These laws define permissible lending terms and rates and some states
even regulate the amount a payday lender can lend and how much they
can charge for the loan. Other states have totally banned payday lending.
Some lenders have gotten around the laws by partnering with banks based
in other states, such as Delaware.
How does it work
Let’s say you need to borrow $255.00. You will write a post-dated check in
the amount of $300.00 made payable to the lender. This amount includes
the finance fee. The lender will advance you $255.00 for a typical term of
14 days. When that term is expired, the lender will deposit the $300.00 post-
dated check into your account and the loan will be repaid. The lender may
offer the borrower an extension if you cannot repay the loan in full but
additional fees will be added to the original amount of the loan. It is not
cheap. If at all possible, get a payroll advance directly from your bank. The
fees are usually a lot cheaper.
Loan Qualifications
Most payday lenders require you to have a verifiable form of income such
as employment, social security benefits or retirement benefits. You will also
need a bank account, in good standing, along with copies of your most
recent bank statement. Some may even require you to have direct deposit.
No credit check is required. However, most payday lenders run your social
security number through a consumer reporting agency called Teletrack.
Teletrack gathers records from businesses across the country who cater to
non-traditional credit consumers, they keep records of past and present
payday loans, among other types of information. They are a consumer
reporting agency and subject to the same FRCA Rules as the major credit
reporting agencies. You are entitled to a free report if you have been
denied based upon information contained your report. Many States limit the
number of payday loans you can have at one time. Teletrack will give
payday lenders information on your borrowing habits. To get your report
visit: Teletrack.
Fees and Terms
The fees are expensive, there is no getting around this fact. Annual
Percentage Rates are typically around 400%. A loan of $200 for two weeks
will cost you approximately $35.00. The average payday loan is fourteen
(14) days; however, in some instances it may be as long as thirty (30) days
if you are paid on a monthly basis.
The Pros
Payday loans are quick and easy to get if you do not have other options. It
may come in handy during times of emergency. They can be attractive to
borrowers who have less than perfect credit and cannot qualify for bank
loans. Payday loans can be useful for unexpected expenses such as car
repair or medical bill. It is not a supplement to your regular income.
Borrowers who do not have access to credit card cash advances or savings
accounts may find payday loans a benefit. But these loans should be used
sparingly and only in case of emergencies.
The Cons
It is imperative that the payday loan be repaid as soon as possible, without
any extensions. If you cannot pay the loan on time you will be subject to
even more fees. The annual percentage rate (APR) on a payday loan
averages about 400%. If you are living paycheck-to-paycheck, as many
consumers are, you may get stuck in a cycle of getting payday loans. Avoid
this cycle and use a payday loan only in the case of extreme emergency.
additional fee.
Loan Amounts
A Payday loan may be from $100 to $1,500, it varies from state to state.
The tremendous growth of payday loans has caused many states to
regulate the industry. Specific laws now regulate the payday loan industry.
These laws define permissible lending terms and rates and some states
even regulate the amount a payday lender can lend and how much they
can charge for the loan. Other states have totally banned payday lending.
Some lenders have gotten around the laws by partnering with banks based
in other states, such as Delaware.
How does it work
Let’s say you need to borrow $255.00. You will write a post-dated check in
the amount of $300.00 made payable to the lender. This amount includes
the finance fee. The lender will advance you $255.00 for a typical term of
14 days. When that term is expired, the lender will deposit the $300.00 post-
dated check into your account and the loan will be repaid. The lender may
offer the borrower an extension if you cannot repay the loan in full but
additional fees will be added to the original amount of the loan. It is not
cheap. If at all possible, get a payroll advance directly from your bank. The
fees are usually a lot cheaper.
Loan Qualifications
Most payday lenders require you to have a verifiable form of income such
as employment, social security benefits or retirement benefits. You will also
need a bank account, in good standing, along with copies of your most
recent bank statement. Some may even require you to have direct deposit.
No credit check is required. However, most payday lenders run your social
security number through a consumer reporting agency called Teletrack.
Teletrack gathers records from businesses across the country who cater to
non-traditional credit consumers, they keep records of past and present
payday loans, among other types of information. They are a consumer
reporting agency and subject to the same FRCA Rules as the major credit
reporting agencies. You are entitled to a free report if you have been
denied based upon information contained your report. Many States limit the
number of payday loans you can have at one time. Teletrack will give
payday lenders information on your borrowing habits. To get your report
visit: Teletrack.
Fees and Terms
The fees are expensive, there is no getting around this fact. Annual
Percentage Rates are typically around 400%. A loan of $200 for two weeks
will cost you approximately $35.00. The average payday loan is fourteen
(14) days; however, in some instances it may be as long as thirty (30) days
if you are paid on a monthly basis.
The Pros
Payday loans are quick and easy to get if you do not have other options. It
may come in handy during times of emergency. They can be attractive to
borrowers who have less than perfect credit and cannot qualify for bank
loans. Payday loans can be useful for unexpected expenses such as car
repair or medical bill. It is not a supplement to your regular income.
Borrowers who do not have access to credit card cash advances or savings
accounts may find payday loans a benefit. But these loans should be used
sparingly and only in case of emergencies.
The Cons
It is imperative that the payday loan be repaid as soon as possible, without
any extensions. If you cannot pay the loan on time you will be subject to
even more fees. The annual percentage rate (APR) on a payday loan
averages about 400%. If you are living paycheck-to-paycheck, as many
consumers are, you may get stuck in a cycle of getting payday loans. Avoid
this cycle and use a payday loan only in the case of extreme emergency.
 |  |  |  |  |  |  |  |  |  |
Payday loans and Payday Advances are high interest, short term loans
based upon your income and checking account. These loans are also
referred to as payroll advance, deferred deposits, cash advance or
post-dated check loan.
based upon your income and checking account. These loans are also
referred to as payroll advance, deferred deposits, cash advance or
post-dated check loan.
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