No Qualifying Payday Advance
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A no qualifying payday advance lending agreement is another way of describing the loan business that makes fourteen day loans available to those with a job and a checking account. The no qualifying description of the loan is a portrayal of the no credit check factor in the lending process. This means that anyone with any kind of sullied borrowing history will probably be loaned some short term money without fear of having a very low credit score. A no qualifying payday advance will also not require a debt to income ratio investigation. This means that while banks and credit unions will not accept borrowers with a ratio higher than forty percent (and it may be lower depending on the individual bank's lending policies) the payday advance loan industry does not concern itself with this issue. If there are qualifying issues, they are that the borrower have the same job for at least three months and is currently employed, and that the customer has an active checking account.
A no qualifying payday advance lending agreement scenario happens something like this: Something unexpected occurs in the life of the borrower and there is a sudden needs for a loan. This could occur with as many as seventy percent of Americans because they are living paycheck to paycheck with no appreciable savings put aside for such an emergency. Emergencies could be as serious as a sudden medical co pay, a needed brake job for the car, or groceries running out days before the next paycheck is due. But because there are no questions asked about the reason for a loan, very superficial reasons could be offered for a paycheck advance. The no qualifying payday advance lenders have built into their lending policies the reality that there will be a certain number of loans that default so the very high interest rates are justified. However, many state governments have not agreed fully with that justification and have begun regulating the industry, with some state's regulation so stringent that the lenders have closed up shop.
In some areas, a flat fee per hundred dollars is allowed. In Ohio, for example, the fee is fifteen dollars plus about five dollars in fees for a fourteen day one hundred dollar loan while in Pennsylvania, twenty five dollars plus fees per one hundred dollars are permissible. The problem with a no qualifying payday advance is the very high annual percentage rate interest on an unpaid loan. In some states, an APR of eleven hundred percent may be applied to an unpaid lending agreement. And so for the person with little or no savings, living paycheck to paycheck could very easily mean that this loan may not be paid back for weeks or months and during that time, the interest rate is climbing, almost exponentially. For a person who is already indebted far beyond the forty percent level, with no discretionary money left over to repay this no qualifying payday advance, this kind of astronomically high interest lending agreement can be the tipping point for despair and futility for the borrower if not repaid in a timely fashion.
A no qualifying payday advance is secured when a borrower either goes online for a paperless loan or drops by a local loan company office. With the local office being used, the borrower must present a picture ID issued by a governmental entity such as a driver's license or state issued ID card. Proof of current employment must be presented, usually with a pay stub and some lenders want to see a utility bill or first class mail addressed to the borrower at the address shown on the ID card. The borrower must write a personal check to the lender for the full amount of the lending agreement which includes the principle, interest and fees, post dated to fourteen days. This check will then be cashed by the lender on that day, which may or may not correspond to the borrower's regular payday. It is in the interest of the lender to have the payoff on the customer's payday. "He that believeth on Him is not condemned; but he that believeth not is condemned already because he hath not believed in the name of the only begotten Son of God." (John 3:18)
If the borrower cannot pay back the full loan amount on the day required, he may ask for an extension. Some states allow it and some do not to try and curb spiraling interest costs. If a borrower is granted an extension of the loan for another fourteen days, the customer must at least pay the interest and costs for the first fourteen days of the loan. A no qualifying payday advance lender will then add more interest and fees to the original loan for the fourteen days of the extended life of the loan. In the areas where this is allowed, extensions might possibly continue for a while adding more and more cost to the original loan.
An online payday advance loan company has a very simple form to fill out. Name, street address, email address and a few other questions are all that are asked. These online lenders also do not ask for credit checks or debt to income ratios to be investigated. These transactions are not a healthy or wise financial decision to undertake. But if someone is determined that this is the only course of action, make sure that the company either online or a local office has been thoroughly checked out. Call the Better Business Bureau and find out how disputes are handled between customer and lender. If using an online service, pay attention to the certifications each company has and call the associations the companies belong to verify their integrity.
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