• Choice,  Credit History,  Loans

    Will One Receive a Payday Loan Without Credit History?

    It is only natural that a lender is interested in accepting reliable borrowers who are likely to repay on time. Thus, loan eligibility standards may be rigid, which is especially true for conservative banks offering long-term borrowing options. Payday loans without teletrack, however, are known to have multiple advantages over traditional banking, including softer application requirements. How lax are these, and could you still secure a payday loan with zero credit records?

    Borrowing history is the main and the most telling indicator of an applicant’s ability to fulfill their obligations. The more loans you successfully repay – the better your score and the more willing a lender will be to accept you.

    Understandably, in online lending, so drastically different from face-to-face interviews, these records are the first thing a lender will consult.

    Here, non-existent credit records may be viewed more favorably than bad credit records, as the latter clearly indicate an applicant’s financial irresponsibility. Moreover, credit history is not the only source involved.

    no teletrack payday loans

    Upon receiving your application, the lender will initiate remote identity checks. They will access your credit records to verify identity and establish your trustworthiness.

    If credit bureaus return no matches, which means that no such records exist, the lender may turn to alternative public sources of data – for example, rental payments, property deeds or utility bills – to find transactions in the applicant’s name. Such data may be accessed through third parties (for instance, RSA). Finally, if these efforts fail as well, the last resort is a manual review.

    This naturally requires time and manpower, so not all lenders will go to such lengths. However, if they do, you may be asked to do the following:

    1. provide an email, fax, or upload a copy of a photo ID;
    2. answer additional questions by phone;
    3. visit the company’s office for an in-person interview.

    With a steady source of income, absence of borrowing history does not necessarily present an obstacle to payday lending. For young people, the absence of borrowing data is an obvious problem.

    How can you open your credit history unless you are allowed to take out loans? The same applies to recent immigrants who are yet to acquire credit records. Such applicants are usually rejected by conventional lenders, which makes cash shortages especially hard to cope with. This is exactly when payday loans may be a blessing.

    A comprehensive approach of a payday lender may ensure responsible first-time borrowers still get a chance to resolve urgent financial problems.

    By using and successfully repaying payday loans, they have an opportunity to build up a favorable credit history. This, in turn, opens them access to more complex borrowing options in the future.

  • Typical Borrowers

    Payday Loan Users: Who Are the Typical Borrowers?

    Each year, as many as 12 million Americans sign payday loan agreements. With the ubiquity of the internet, short-term loans, especially payday offers, have become accessible like never before. So, who are the typical applicants, and how do they usually spend the borrowed money?  

    First and foremost, payday loans were devised as a form of emergency financial assistance to individuals who are short of cash. Whether it’s unexpected medical expenses or utility bills demanding urgent payment, such credits enable you to pay your debts quickly, avoiding mounting overdraft fees and penalties. In essence, Internet access and a bank account are all you need to apply, as your identity details are verified remotely. Moreover, eligibility requirements are relatively simple, as no collateral is necessary. So, who are the most typical borrowers?

    Naturally, most often, these are citizens with lower income, for whom unexpected costs are difficult to cover. As concerns household income averages, those making less than $40,000 per year (most commonly, $15,000-$25,000) are almost three times more likely to apply. These people often struggle to make ends meet. Due to the simplicity of requirements, they may have little or even zero credit history (borrowing for the first time), and no collateral, which would make securing a conventional long-term credit highly improbable.

    Banks tend to view such applicants as risky, refusing to help them cope with difficult circumstances. Payday lenders, on the other hand, may still give these people a chance. Their services make it possible for millions of hard-working citizens to build up or improve borrowing history and resolve financial problems.

    The Characteristics of a Borrower

    Demographically, urban residents aged 25-49 are said to use payday lending most often. These are active internet users who willingly take advantage of online borrowing. Geographical coverage is linked to local legislation differences since short-term loans are available in some but not all US states. Moreover, state laws determine possible conditions of agreements, capping the maximum interest rate and/or the maximum loan amount, extensions (rollovers), and other charges.  

    Despite the original idea behind payday loans (short-term cash advance until the next paycheck arrives), some borrowers may use their money for regular expenses, rather than emergency costs. Naturally, with timely repayment, payday loans may indeed be taken out repeatedly. A borrower may even avoid penalties for late payments by asking for an extension, lengthening the term with only service fees accumulating.

    However, payday loans are not a universal remedy against financial failure. Any permanent lack of money signals a need for more prudent budgeting and better employment conditions. When cash shortage is constant, borrowed sums may cover credit card bills or even other existing loans. For lenders, the latter is a red flag, making approval of new loans in the future less likely.

    However, when payday lending is used sensibly, it serves as a quick, easy and convenient fix for cash shortages. Here, regardless of your income, a payday loan is a wise choice provided that you study your agreement carefully.

  • Loans

    Payday Loans: Why Borrowing Online Is Most Convenient

    The advent of the Internet has revolutionized the global economy and the way financial services are provided. While online banking enables you to manage your accounts, arrange transfers and view transaction details from the comfort of your home, the world of accessible lending has also benefited from digitization. With payday lenders offering their services online, you may now skip the hassle of conventional bank offices and secure a short-term loan in a matter of hours. All you need is a bank account and a steady source of income. Let’s zoom in on the details of the process.

    The idea is simple: if a cash shortage occurs, you may take out quick and accessible payday loans through online lenders. To avoid penalties for unpaid bills, you may cover emergency expenses with these borrowed amounts, repaid when the next paycheck arrives. Typically, the term spans 2-4 weeks, and the maximum sums are capped by local state legislation.

    In the past, borrowing required visiting a bank office and waiting in line. Today, payday loan applications are easily filled out and submitted online, and approval is received in a matter of hours. Fill in your details, specify a source of income, include a recent bank statement and your account number. Once you click “submit”, the lender will start remote identity verification procedures, assessing your borrowing history.

    This does not require your presence – the lender will reach out to credit bureaus or search in alternative sources of financial records. Normally, all communication is done by phone, chat, or email, so you can even answer lenders’ questions while on the move. If approval is received, you may expect to see borrowed funds in your account on the next business day. Repayment of a payday loan is done just as conveniently, with the lender withdrawing the sum on the due date, possibly via direct debit or a post-dated check. Early repayment is possible and usually entails no fees.

    All these details vary between lenders, but they must all be stipulated in your loan agreement. Here, agreements with online lenders are no different from conventional ones. As  binding two-party documents, these must be studied and understood, and it is best to ask the lender for clarification when necessary, which is also easily done remotely. Aside from the loaned amount and the due date, your agreement will also define all charges, including interest, penalties and fees. The agreement must list all your rights and duties, ensuring that all procedures are clear. Attention to detail will guarantee the due date brings no surprises.

    Overall, online payday borrowing offers multiple advantages over in-person bank visits. Aside from the significant time-saving and accessibility, it makes all borrowing procedures prompt and simple, providing a detailed legal agreement protecting the rights of the customer.