In the previous years, many Americans have considered borrowing money via a no credit check payday loan. However, they do not realize that this type of loan involves plenty of fees. Because of this, it is important for borrowers to fully understand the requirements of payday lending.
When obtaining a payday loan through a cash advance, the process of credit check that other loans require can be avoided. However, in lieu of this, borrowers must pay extra charges amounting between $15 and $35 dollars. This amount is usually charged for every $100 loan. Moreover, the charges will continue every time a borrower takes a paycheck but is unable to settle the total amount in full. Consider a $5000 cash loan. Fees can run up to $1000.
Instead of assuming that there will always be available cash to rely on from payday loans, borrowers must use this alternative for emergency purposes and decide to borrow only when they have a definite plan in mind to pay back the loan immediately. Unfortunately, there are several borrowers who impulsively take advantage of this loan source and end up not knowing how to pay back the amount they borrowed. Consequently, they get into a real debt situation that becomes too difficult to get away from.
In order to avoid this, borrowers are recommended to consider other forms of loans if they think they are not capable of paying off payday loans. Bad credit unsecured personal loan is one such option. Although this may require credit check, it can be better compared to payday loans because it does not charge too much fees. Also, it can be paid in monthly installments which combine a percentage amount of the principal and interest. This makes it lighter to the borrower.
For borrowers who really want to avoid credit check requirements, they can still opt for other loan alternatives such as personal loan and installment loan. Just like bad credit unsecured personal loans, both of these can be settled with monthly payments rather than using one’s paycheck to settle the full loan amount.
- The Hidden Extras of a Loan (2009tax.org)
- 24hrs Payday Loans – Know The Facts (debt-consolidation-2u.com)