The Real Cost of Short-Term, No-Credit Check Borrowing

Like my blog? Sign-Up for a FREE newsletter! OR Give a ‘Like’ to my FaceBook Page

While the economy has struggled, payday lending has skyrocketed in popularity as many people use it as a way to help make ends meet. Payday loans are a type of short-term borrowing, in which the borrower does not have to go through a credit check to get approved. These loans are widely available online and from cash advance merchant’s nationwide. Although these lenders can be easy to work with, the loans come at a high price to borrowers. Here are a few things to consider about payday loans before you choose to get involved with them.

Who Uses Payday Loans?

Payday loans are typically used by individuals who do not have the best credit or by people who have low incomes. They are very easy to get, and they typically only require a borrower to have a certain monthly income in order to qualify. People use them for a variety of reasons. For example, if you have some kind of emergency expense that comes up, such as your car breaking down, you can use the payday loan to help cover the costs. These loans are often used by people who just need a few dollars to make ends meet until their next payday.
Fees and Interest Rates Although this type of loan can be very convenient, it does not come for free. If you are thinking about getting a payday loan, you need understand what types of fees and interest rates you may have to pay. The fees will vary from one lender to the next, and from one state to the next. Some payday lenders charge an application fee, late fees, and other fees along the way. Others just charge you one flat fee for the loan. Every state has specific rules that are put in place in order to protect consumers. For example, many states put limits on the amount that can be borrowed with this type of loan, as well as maximums on the interest rates that can be charged. Although most states do put limits on the amount that can be charged, the annual percentage rate typically works out to be quite a bit. Some lenders charge amounts that equate to 300 percent APR. Since the loan is for only a few weeks, it does not seem like you’re paying much interest. In reality, it is pretty expensive. Some states put limits on the amount of time that a loan can be taken for. For instance, they may only allow for terms of two to four weeks, depending on the jurisdiction.


The primary advantage of using this type of loan is that it is quick and easy. You don’t have to worry about a complicated application process, and you can get access to money even if you have poor credit. You could get a loan even if you have a bankruptcy on your record.


The biggest disadvantage of this type of loan is that it is expensive. With such high interest rates, you are paying a large amount of money to the lender simply for the convenience of being able to access money. Another drawback is that these loans are easy to get hooked on. Many people use multiple payday loans on a regular basis. If you are considering using this type of loan, it is important to do your homework and make sure that you’re not being taken advantage of by the lender.

Author bio: Ryan Devereux writes for where you can find quick cash advances after deciding if they are right for you.