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Payday Loans Online No Credit Check Can Be A Huge Help

Category: Financial News

Jenny wants to know if it’s okay to get  payday loans online no credit check:

“I’m a mother of two and I have a bad credit because I couldn’t pay up my past debts when I lost my job seven months ago. I’m still coping to pay up my loans (I’m not irresponsible enough to run away from loans). But since I’m living from paycheck to paycheck now, I need to borrow occasionally to cover the current months’ budget while I repay my past loans. I thought that I’d be better off if I can borrow from lenders that don’t check on my financial record because this will mean faster processing and guaranteed approval. However, I’m having second thoughts considering some stories that I hear about this type of loans. Would you recommend these loans to someone like me?”

– Jenny, 41

Payday loans online no credit check are practical, indeed. But we have to change the question a bit to give a better answer: When do I need to get payday loans online no credit check?

These type of loans are often used for emergencies and they are paid within a payday period. The popularity of payday loans online no credit check can be traced to the credit crunch or the period when many people started to default on their credit and they borrowed from banks and mainstream financial institutions. When banks started to shun away borrowers because of poor credit scores, payday loans online no credit check seemed a good option.

So how come payday loans are available when banks wouldn’t give out credit to these people? A huge caveat: loans are for small amounts while the interest rates and penalties are high and more severe because of the risks lenders face with borrowers who have defaulted in the past.

Lenders of payday loans online no credit check work on the model of volume business. They get as much borrowers as they can and they really don’t expect that all borrowers can pay back. Which brings us back to Jenny’s question. If payday loans online sound tempting, you should think again, because the Teletrack system that tracks your credit history is there for a good reason.

What is Teletrack?

It’s an industry-wide system that allows financial institutions, banks and lenders to see your credit performance. When you make a loan or payment, that record is put by the lender in a Teletrack system that says you’ve made that loan or payment. Teletrack systems are offered by private third-party providers like this company. The industry-wide system allows banks, lenders and you yourself to check on your credit score (read more on this in this online loans no credit check article). Over time, your Teletrack record profiles your loan and payment performance, and this is what banks and mainstream lenders check to approve or decline your loan application. It goes without saying that lenders of payday loans online no credit check do not check your Teletrack. Sounds good? Not really.

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Check and balance

Teletrack acts like a check-and-balance peg for both lenders and borrowers. For lenders, it gives them a clue if you’re a high- or low-risk borrower. Teletrack is not only a black-and-white tool used to accept or decline loan applications; it can also be used within the varying shades of loan amount and payment terms that lenders are willing to offer based on your credit score.

Why is it good for me?

For a simple reason that Teletrack is a good reminder and warning that we better pay off our debts to avoid ruining our credit scores. Without this “nuisance” it is far easier to default and forgo payments when no one, except the poor lender, will know anyway. Think of it as the note posted on the clubhouse billboard that lists members with arrears. Members wouldn’t want to be on that shame list so the tendency is to meet their obligations on time.

However, getting back to Jenny’s concern, we don’t discount the practical use of payday loans. In the UK and Canada, these loans have proven their worth. In times of financial difficulties, what are your options, really? So, how practical are they? It depends on how practical you want to make them. In short, payday loans are meant for emergencies and you must estimate how urgent and critical the emergency is to warrant payday loans online no credit check.

Learn more about credit score

If you have a good credit rating, you can get easy access to valuable loans. Learn all about credit score and how to boost yours. Improve your financial health through smart research and implementation.

One last thing

Lenders offering payday loans online no credit check may not be checking your Teletrack record, but your payment to this type of loans will be recorded. That’s a tell-tale against your credit score. But don’t worry, there are regulations that limit or even prohibit the use of your Teletrack to profile you. Two years ago, Daily Finance reported that a Teletrack provider was penalized for two million dollars for selling sensitive Teletrack data to marketers.

CONCLUSION

Payday loans online no credit check are practical as long as they are used for practical reasons. Medical emergencies and business emergencies can be valid, but hot offers and limited deals are definitely not.

By Louie Andre

B2B & SaaS market analyst and senior writer for FinancesOnline. He is most interested in project management solutions, believing all businesses are a work in progress. No stranger to small business hiccups and drama, having been involved in a few internet startups. Prior to his for-profit ventures, he has had managed corporate communications for a Kansas City-based Children International unit.

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6 Comments »
Pam Hicks says:

Payday loans are easier to get compared to bank loans especially if one’s credit score is bad. However, the interest rates are high. So, think twice before applying for a payday loan, as this article suggests.

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NicoleR says:

Payday loans should only be availed in case of dire emergencies. Make sure you will be able to pay it off to avoid falling deeper into the debt trap.

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Sandra Masters says:

I like how you put Teletrack as a kind of shame campaign. I grant that payday loan borrowers are often already down and out to start with so a Teletrack reminder may not ring a bell. I always regard payday loans as unnecessary, that is, if you’ve been saving up and planning your finances ahead, you won’t need payday loans. Of course not everybody does that, so they end up taking out high-interest loans. I just hope they do use the loan in an emergency and they pay back to avoid making their financial health any worse than it already is.

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Klein McCabe says:

I am newly married. My husband and I are saving to buy a studio apartment in the city. I must say it's a challenge to power through and sacrifice for a new home, and we have borrowed from these lenders. We are just finished paying back our last one and looking forward to a more frugal way to celebrate the coming holidays so that we don't go overboard with spending. thanks for writing this article!

Reply to this comment »
George Jaffrey says:

It depends on how much interest these loans would charge from us. we get very little interest in our savings accounts and credit is not the answer to financial health! But, this is a good option to have when you face medical emergencies.

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Deirdre Madson says:

I have used these loans in the past to pay my supplier for my online store for garments. I am in my mid-forties and very organized with my finances. I hope people in their 20's don't use these loans to but their first Christian Louboutain shoes! It's good to have these options, long as one is mature enough to pay back!

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