What is your worst fear when you apply for a payday loan?
Most individuals liken the process of obtaining a payday loan to a root canal treatment. The anxiety associated with undergoing a thorough credit check could be a major nightmare. It is not just the fear of rejection, but rather the intimidation brought on by the thought of someone unknown to you scouring through your personal credit report with a fine tooth-comb.
If you have been refused credit or a loan in the recent past, you are probably already aware that your credit history is not being looked upon favorably by lenders and financial institutions. If this description matches your experience, you have come to the perfect place: No credit check payday loans are designed just for individuals like yourself — people who are haunted by their dismal credit numbers.
No credit check payday loans (aka bad credit payday loans) offer hope
Did you know that there are lenders who specialize in working with a niche of individuals with bad credit? These lenders focus exclusively on borrowers whose credit ratings have tanked in recent years. Lenders who offer bad credit payday loans are well aware, not just of your financial situation but also your credit standing. Despite the uncertainty associated with the repayment of the loan, they have created programs that cater exclusively to people in financial distress.
Why would a lender offer a bad credit payday loan (no credit check payday loan)
Well, there are several reasons why lenders are willing to take their chances. First, most individuals are honest and willingly repay the payday loan they have borrowed. Statistically, the chances of default are much lower, much contrary to common public perception. Apart from numbers, payday loans are generally made for a shorter duration of time and so the cash flow picture is much better for lenders. They lend money and receive it back in a relatively shorter period of time. Furthermore, since the loan is pegged against your next paycheck, lenders are relatively secure in receiving their principal back. That is not to say that all payday loans are approved.
There are some instances where your payday loan may be disapproved as well but overall the convenience of not having to undergo a credit check is a major relief for most borrowers. Phew!
There is also a breed of secured payday loans which are secured against a fixed asset that will serve as the lender’s primary hedge should you default.
What kind of information will I need to provide to obtain approval for a no credit check payday loan?
Every lender is different in terms of how they operate but at a general level you need to provide proof about your age (18 years or older) and also give the lender a picture about your financial status such as your income and income sources. This way, they have a secure picture to work with