This is because a payday lender does not run a credit check to determine if you qualify for a cash advance. All the payday lender wants to know is where you work and how much you make on an average pay check and your banking information. This information lets them calculate the maximum amount a person is eligible to borrow.
Of course payday loans are a short term solution. While clients pay a minimum amount of borrowing fees plus an additional $10.00 off their principal, it is advised to pay as much as possible as the fees can end up adding to a huge APR interest rate when compared with other types of credit. A client can increase their additional amount off their principal to pay their loan out quicker or to pay the full amount at any time.
However, when one has poor credit, the chances of obtaining a cash loan from a bank is virtually not going to happen. Sometimes, a cash advance with a payday loan is the only viable alternative to solve a cash flow problem. As long as one pays the loan back on time, the convenience of being able to acquire cash in this way is usually well worth it.
It is often possible to acquire a payday loan online. Many lenders have web sites set up to take your application, verify your employment and grant pre-approval within minutes. Then, once the application is approved, the needed cash is deposited directly into your bank account the same day if approved before 1:30 EST, making it available to you quickly and easily. One could never receive this level of service from traditional lenders or banks.
Banks always require a person to come in to one of their branches to fill out the application for credit. They also require a credit check, even if one is an established customer. Sometimes, this can lead to denial of a loan, regardless of the fact that one has had loans from this bank in the past and always paid on time. A change in one's credit rating can happen quickly and have a negative impact on the chances of getting the needed cash from a bank.
Payday loans also have the advantage over traditional loans in that small amounts of cash can be borrowed for a short term. Most traditional lenders have a set amount they will loan and a fixed time to pay it back in so that they have a guarantee of how much they will make in interest.
A payday loan is made for a term not to exceed the time until one's next pay cheque. The fee is set up front, so there is no question of how much the loan will cost. And the amount of the loan can be anything from $50 up to the maximum amount established when the application is approved.
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