Good credit is important, for anything you need to buy; especially a house. Did you know that there is a no credit loan that anyone can be granted? This is a short term loan called a payday loan.
It seems that these days you need credit for everything; homeowners insurance, getting any type of loan or credit card, and even securing a job. Credit scores are used to determine how much of a loan you can receive or if you can receive any loan at all. Also, your credit score is used to determine the rate of interest that will be applied to the loan. The better your credit score, the lower your interest rate.
There are three credit scoring companies which are Equifax, Experian and Trans Union. However, the most important credit score is the FICO (Fair Isaac Company). The FICO developed the mathematical equation for determining your credit score. That score can range anywhere from 300 to 950. The higher the number, the better your credit is and the lower the consumers loan default risk. Banks, credit unions and lenders altogether run your credit to see how much of a credit risk you are. This, of course, makes it tough for those of us who are looking to borrow money but don’t have a very good credit score.
For a payday loan you need not worry about these scores. A payday loan is a no hassle, no credit short term loan that carries a high interest rate. Comparatively to the national credit percentage, however, the borrower does end up paying more in the long run because the duration of this type loan is short. Your FICO score will have no bearing on the payday loan you apply for.
There are actually very few requirements necessary in order to get a payday loan or cash advance. The borrower needs to be eighteen years of age, be employed with proof of income via a bank statement and not have a considerable amount of other payday loans out. There will be no credit check. In fact, if the borrower keeps up with the repayment dates, their credit score may actually improve. Credit scores are important, but did you also know that the credit score that the consumer sees when they order their credit report is actually different than the credit score that the lender views. This can harm the consumer is many ways because the consumer will waste time in applying for a loan that he cannot get due to his/her credit score. Also, the lender will charge them a higher interest rate than they were expecting and the borrower will accept it.
The credit score discrepancy is real and no one really knows what their credit score is until they try to borrow. With a payday loan, all the conditions will be disclosed upfront and there will be no credit scores involved to be surprised with. As with any business venture, the consumer needs to shop around for the best deal on a payday loan. There are a plethora of payday lenders to choose from. All payday lending is regulated by the state that you live in, so payday lending is a safeguarded experience.
Payday lenders will vary in their terms as to interest rate fees and amount, as well as the repayment date. Take notes on a number of lenders and find one that will work with you and suit your financial needs. Payday loans are used for a variety of reasons, but don’t borrow more than you can afford to pay back in the given amount of time. Payday lending is a blessing if the borrower can comply with all the terms. It is a loan for those who can’t qualify for other loans and the cash the borrower receives is instant.