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Most people have run into a financial situation that requires immediate attention at one time or another. It could be an emergency car repair or a past due electric bill. Many of these people do not have savings to draw from and do not have favorable credit, leaving very few options for resolving financial emergencies. Payday loans for bad credit can be a practical idea for people facing this predicament.
The advertising slogan “Bad credit? No problem!” Plastered on almost every cash advance site on the web. The reason is…it’s true! The “no credit check” is one of the things that makes payday loans so attractive to so many people. You may be carrying some much-needed cash in your pocket and your creditors will never know, unless you default on the loan. Most cash advance lenders do not even pull a credit report during the approval process. They consider stable employment and verifiable income as your credit.
A payday loan is a “cash advance” on your next paycheck, so in a sense it eliminates the need for a credit check to verify that you pay your bills on time. You are obviously experiencing some kind of financial difficulty or you would not be considering this type of short term loan. Therefore, a difficult financial background as reflected in your credit report does not become a factor. Many lenders require payroll direct deposit for approval because it allows them to electronically recover their loan payments with greater certainty and less chance of default.
The best part about getting a payday loan without credit check is that you will not be penalized for financial problems in the past. That is, the same two people applying for the same loan amount will be charged the same rate regardless of their credit history. At some point in our lives, most of us have heard, “we could offer you a lower rate on your loan if you had a higher credit score”. Those words will never be spoken when applying for an advance in your salary. Since cash advances are meant for emergency funding situations as opposed to longer-term loan payments, some of the factors at play for other types of loans are not even considered during the payday loan approval process.
Although your credit report is usually not taken into account during the approval stage of your cash advance, it can be a factor if you default on your payday loan. Many payday loan companies report delinquencies to the credit bureaus. This reporting can bring negative consequences on your accounts that count towards your credit score. Outstanding payday loans will typically be reported as “in collections,” or an uncollectible amount, and can remain on your credit report for up to seven years.
It’s important to be smart and responsible when getting a cash advance. Borrow only what you absolutely need and budget your money so that repayment doesn’t hold you back. Try to leave a cushion for your daily expenses for the week your loan is due. Many people are already facing severe stress while applying for a payday loan, but you cannot get caught up in the ease of getting a loan. Taking out multiple payday loans or borrowing more than you actually need just because it’s available to you is unwise. You should be honest about your budget and try your best to make good use of your cash advance without putting yourself in a bad financial position.
Most people are faced with financial emergencies at one time or another and many of these people have had a difficult financial history. This much is understood in the short term lending business. A good person can have bad credit and still need a payday loan to help them pay off their overdue electricity bill. This is the reason why short term loan companies provide you with quick and easy cash advance without any credit check. In exchange for that convenience, you agree to pay back the loan on your next payment date. It really is that simple if you only borrow what you can repay.
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