Posts tagged: no credit payday loan

No Credit Check Payday Loans

It just doesn’t make any sense to the average person who has no experience with the world of payday loans how these lenders can offer no credit check payday loans. The whole lending system hinges on people’s credit scores right? If we don’t check their credit we’re going to end up with billions of dollars in defaulted loans. Well, I suppose that’s what has happened with the mortgage industry, but payday loans are actually a different story.

If you look at the qualification process for a payday loan with no credit check, you realize these lenders have figured out what an applicant needs to bring to the table in order to be likely to repay. I did a little checking and found that the four most important things to a payday loan store are:

1. Whether the applicant’s income is set up on direct deposit to their bank. I don’t know if that’s just an indication of financial responsibility, or if the lender could actually  has you sign something that says they can garnish your direct deposit income in the event you don’t pay.

2. Whether you’ve held your current job for at least three months. This is interesting because they aren’t checking a credit score, but they are looking for some kind of stability in your life to feel more confident that you’ll pay back your loan.

3. A bank account in your name, which you’ve had open for at least three months. Again, I think they’re just looking for some stability and financial maturity here.

4. $1,000 per month minimum for your net income (which means after taxes). This goes purely to your ability to pay the loan back. Most payday loan operators won’t lend above $1,000, so they’re basically saying we would never lend someone more than one month’s earnings. And I’d guess in most cases they probably won’t even do that. Since $1,000 is the minimum required income, and $1,000 is the maximum available loan, you’re probably looking at more like 25% to 33% of net income as the maximum loan amount.

If you can meet these criteria, you can probably get the loan you want. I just hope you only need it once.