George asked us the following question:
“I want to take a payday loan, and I came across this no teletrack payday loans guaranteed approval service. What does ‘no teletrack’ mean? Is it safe for borrowers to deal with lenders offering these loans?” – George, Grand Forks, ND
No teletrack payday loans guaranteed approval means the lender won’t check your record on past loans. A teletrack is a nationwide system used by many payday lenders to check on borrowers’ loan performance. The system is provided by a private third party and lenders subscribe to it to check borrowers’ data. It serves two purposes: to protect lenders from fraudulent borrowers and to assess borrowers’ loan behavior.
Today, more advanced reporting systems allow teletrack to assess borrowers’ financial transactions and credit history more closely. That means your credit profile is more accurate and lenders can use it when deciding if they should offer a loan.
If you have an outstanding debt or unaccounted loan, it will appear in the teletrack database. This will be a factor if you can get another loan or not, which is the same practice in the UK or Canada, depending on your risk assessment by the lender. Teletrack systems are used by both storefront and online lenders, and by other micro-lenders. However, it doesn’t include your bank activities, which is reported in another system called Telecheck or Chexsystems. So, is this loan for you?
What are payday loans, and how do they work?
Payday loans are short-term, high-interest loans typically used to cover urgent financial needs between paydays. They are often used by individuals facing unexpected expenses or financial emergencies.
The application process for payday loans is relatively simple and fast. Borrowers typically need to provide basic personal and financial information, including proof of income and identification. The amount that can be borrowed varies, but it generally ranges from $100 to $1,000. Repayment is due within two weeks or by the borrower’s next payday.
The repayment terms for payday loans are strict. The borrower is expected to repay the full loan amount and high interest and fees on the due date. Failure to repay on time can lead to additional fees and the possibility of the loan being rolled over, making it more difficult for the borrower to pay off the debt.
While payday loans provide quick access to cash, they come with risks. High interest rates and short repayment periods can lead to a cycle of debt for some borrowers. Critics argue that payday loans can exploit individuals who are already financially vulnerable. As a result, many states in the U.S. have implemented regulations to cap interest rates or limit the number of payday loans a person can take out in a year.
Pros and Cons of teletrack
Loans that use teletrack means you’re likely dealing with legitimate lenders because loan providers are closely scrutinized before they can access the system. Likewise, the lenders’ terms are more likely regulated by government so you are assured of Fair Credit Reporting Act, which governs the collection and use of credit information. However, lenders that use teletrack have more stringent requirements, making it harder for you to get a loan.
When you need no teletrack payday loans guaranteed approval
If you defaulted in a payday loan before, or had problems paying on time, it is indicated in the teletrack system. Applying for fast and easy loans again may pose a problem since lenders will consider your past record to anticipate your ability to pay back. In this case, a no teletrack payday loans guaranteed approval can be helpful especially if you need the cash now; and more importantly, if you know that you’re more capable to pay on time today.
When you may not need no teletrack payday loans guaranteed approval
If you don’t have a late payment or bad record on previous payday loans, any direct lender will likely give you a quick guaranteed personal loans approval. Even if you have a bad credit incurred from the bank, this record is not reported in teletrack, so it should not affect your application for payday loans. In this case, you have more lenders to choose from (those that use or don’t use teletrack) to get the best terms for your loan.
How to boost your credit score fast
You don’t have to worry about teletrack if you could boost your credit score. Try to implement these tips to raise your credit score quickly, and avail loans easily.
CONCLUSION
You may be wondering why some lenders will not use teletrack to assess your risk. Isn’t it self-defeating on their part? It is, in fact. That’s why it’s more likely that this loan will have a higher interest rate than regular payday loans, or that you may be charged with extra fees to augment that risk for the lender. While some states put a cap on the interest, a University of Washington report shows that some states do not regulate interest rates.
Just remember one thing: this loan gives you a breathing space to get emergency cash for now; use it wisely and pay it back to improve your loan record so you’ll have more flexibility in the future. More lenders to choose from means you have more chances to pick lenders that follow these good practices recommended by UK-based The Good Practice Charter.
Why is FinancesOnline free?
I understand some borrowers use payday loans to pay for their student loan. Is that even recommended given the stiff interest and penalties and the short term nature of payday loans?
For the individual it isn't recommended, unless he expects a windfall in the coming weeks. For us taxpayers, yes, any legal way that we can take back federal-funded student loans works for me. On that note, let me explain why payday loans are better for taxpayers. The government likes the idea of acting as middleman between lenders and borrowers. Problem is, when the loan defaults, guess who pays for the principal? The government, or us, to be specific. What's supposed to be a problem between a lender and borrower becomes our problem, too. Meantime, payday loans are entirely private. I don't care if the lender cannot get his money back or the borrower has to pay a high interest. I'll get on with my day assured that my taxes are secure.
No teletrack loans are definitely at the edge of what's legal and can be argued to be predatory. But think about it, when you can't pay back, the lender won't and can't harass you. You end up with more debt and the lender ends up with less money. Predatory loan sharks will employ dirty tactics like harassment because they work under the radar of what's allowed. In really dire times, no teletrack loan may be that last boat to save you from financially drowning, when your only other option is to wait for pirates to take you on board.
This no teletrack payday loan seems for the most desperate borrower. It’s sure to have a really high interest and some add-on fees to negate the risk. The rule of thumb is, if you can, go for the more standard payday loans or try your government first. I did some digging and I discovered this USDA lending program for rural families. http://www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program If you’re a low- or middle-income househould with a steady income you may be eligible. The federal agency acts as a middleman to facilitate the loan proceeds from authorized lenders to qualified borrowers.
You’re talking about the USDA Rural Development Guaranteed Housing Loan Program, which is a housing mortgage for low-income families in rural areas. You cannot use it for any other reason except: to buy a house, rebuild, renovate, or relocate. You must also be poor to get the loan, meaning, your income is 50% below the median income. In spite of this, you still must afford the mortgage plus taxes and insurance, typically 24% of your income.
Who is behind teletrack? Is it a private corporation or federal government-run? How did it manage to get a hold on our credit information? It sounds powerful and we borrowers are at its mercy.
Kate, as the article cited, teletrack is regulated under the Fair Credit Reporting Act. For one, it cannot reveal to a third-party who took a payday loan, which companies use to benchmark their customers. It’s no more powerful than, say, Facebook, which has many of your sensitive personal data.
Is there a way you can find out if your credit information is being violated by teletrack? I took a payday loan before and after that I noticed I had a harder time getting a credit from a retail mall in my neighborhood. I suspect they knew of my payday loan, but I don’t have a proof.
I’m not sure Manny if you can prove it yourself, but from what I remember teletrack did commit this violation by selling lists of payday loan borrowers to marketers. From what I know the FTC sued teletrack for about 2 million after the federal agency’s investigation. At the least, we know that FTC is keeping a close tab on teletrack. I hope that gives you some peace of mind.
Scammers can take advantage of your dire financial situation when you try to get a bad credit loan. If a lender asks security fees upfront to “process” a loan, he is sure to be a fraudster. Beware of such scams in the bad credit loans marketplace.
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