Payday loans are designed to help people escape a challenging financial situation. They provide quick cash that can be used to pay for an emergency, such as an unexpected medical bill, with the promise that the loan will be paid off in a short amount of time. For example, one website advertises getting the best payday loans to join with no credit check and even invites you to submit thousands of dollars to them to get started!
Of course, people should only get payday loans if there is no other option besides taking out a bank loan or selling some personal property. Payday loans have many downsides, so before going this route, make sure everything is laid out and understood beforehand.
1. The Interest Rates are Too High
The interest rates on a payday loan are incredibly high and can even be as high as 300%, not including the fees and other charges. When you get a payday loan, you may have to repay this loan more than four times a year.
2. There is No Documentation Needed for Getting a Loan
While it is suggested that people with bad credit should at least try to get one of these loans before they go into even worse financial situations, no requirements or documentation are needed! Your personal information will be kept confidential, so there is no need to bring proof such as a bank statement, tax returns, or pay stubs to get the money out.
3. There is No Credit Check
Unlike bank loans, where you will pay interest rates based on your FICO score if you don’t qualify, payday loans are designed to get you the money quickly. There isn’t a credit check to evaluate your credit history, get this loan approved, and then pay it off.
4. You Will Not Qualify for a Loan without a Paystub
Getting approved for these payday loans almost always requires that you have submitted at least one pay stub to the lender.