Dec 13, 2011

No Employment Verification Payday Loans: It’s Time to Solve Your Financial Urgency Problems

Payday loans are used to bridge a small gap between your current bank balance and your financial requirements, within the space of a single pay period – so either a month or a week. They are structured to reap a comparatively large interest payment in a short space of time, to make it worthwhile for the lending companies to run their business. Getting pay day loans online is a relatively simple and often speedy process, with some loan providers even offering you a loan without the need to verify that you have employment.

If you are going for a no employment verification loan, you will need to prove that you either have the collateral (that’s something you own outright, which the company can take from you and sell if you default) or the backup to guarantee the money. Often a payday loans company will ask for someone else to co sign your loan, guaranteeing that he or she will make payments if you default.

The short term nature of pay day loans online makes it vitally important that you know what you are borrowing the money for and when you are going to pay it back. Without a viable repayment plan (and in the case of a payday loan, a viable repayment plan is one that clears the whole thing in less than a month), you run the risk of spiralling interest payments. That large APR, designed (as noted above) to reap a reasonable payment in a short loan period, can become unbearable if you don’t clear your loan within a maximum of eight weeks.

If you have “financial urgency problems” you do need to understand that short term solutions may not actually be very helpful to you. Pay day loans online are really intended for people who don’t have financial issues of any magnitude. They’re supposed to deliver small sums, not big ones; and as we’ve noted twice already they carry a heavy annual interest rate. As with a lot of financial products the old adage applies: loans are only really a good idea if you already have the money, or will shortly have the money, to pay them back. People who need loans are often precisely those people who aren’t suited to getting them.

No employment verification pay day loans online, then, are in some ways the most dangerous of all your options. Just because someone will give you money without evidence that you have the wage to pay it back, doesn’t mean that they should. If you borrow knowing you are going to default then you’ll have to be sure you can afford to lose the collateral you put up to protect the loan.

No employment verification pay day loans online can be good news for people who have got the wage to pay the money back, because they’re sometimes given slightly preferential APR. If that’s your case, you have more shopping around to do!

Pay day loans online can bridge a gap between your current financial situation and your pay packet: as long as you can afford to pay the whole loan off in one go.

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