Do all payday loan companies check your credit score?

credit check

Do you know the various benefits of a payday loan? Have you seen any advertisement that says how you can change your life by taking a payday loan? The fact is that this kind of loan offers many advantages.

One of the most important advantages that to avail this type of loan is extremely easy and quick. You just need to fill up the application form and later everything else will be done by the lender.

A Payday loan is also called a cash advance. It is a short-term loan. You need to pay a fee if you want to borrow money. You can take this loan for a week or two as well. It can be quite expensive as it is an unsecured loan. However, it is very easy to avail.

Why do you need to take a payday loan?

There may be many reasons that include any medical emergency, unexpected bills, or many other reasons. 

Another benefit of a payday loan is, if you have a low credit score, you can still apply for a payday loan. If you are wondering, do all payday loan companies check your credit score?

Well, we must say – Payday loan companies usually do not run your credit check report before approving a loan. They do not do much leg work at all to make sure a borrower can repay the loan. Instead, these companies use your income verification as their credit check.

But take a note:

While payday loan offers several benefits, you have to be very careful to repay them. A payday loan is beneficial only if you can play well and able to pay back to your lander on time. If you are not sure how you can repay, it can be costlier.

If you want to enjoy all the benefits of this quick loan, it is necessary to repay in time. However, to get approval for a payday loan is extremely quick.

And also we said above, your credit score does not affect the decision of your lender in any way. That means, if you have a bad credit report, you are still eligible to avail of this loan. If your credit report is low, do not worry! You can apply for payday loans.

Main differences between a credit and a loan:

In financial terms, a ‘loan’ and a credit, although they are similar, have differences. In the loan, the bank provides the customer with an account, where the customer will access the amount of money he needs and he usually pays the requested loan periodically, with the expenses and interest added by the entity.

For its part, in a ‘loan’, the bank makes available to the debtor a fixed amount of money, which must be repaid, together with the interest, at a predetermined time. 

It is usually a medium or long-term operation, which is amortized in regular installments as the client pays for it. However, in both cases, it is the banking institution that lends money so that within a certain period it will be returned together with some interests (principal + interest).