Most of the time, people that want to apply for a personal loan need to have a job and good credit history, or so we thought. Today, there are credit options available that not only doesn’t require a credit check, but also appears to not need a job as well.
Payday loans, often called cash advance loans, are becoming very popular today and for the wrong reasons. They are intended to be short term cash solutions for people that have unexpected financial situation come that are not accounted for in a normal budget. Often, these types of emergencies can make it difficult to stay afloat or keep up with bills, so lender provide quick cash loans to people to get them by until next payday.
When used for emergency cash, and paid back on time, payday loans can be a great way to stave off financial worries without hurting or effecting personal credit history. The reason is that these short term loans don’t have any installment payments so they don’t get reported to the credit agencies, and lenders don’t worry about checking credit history to approve them. Short term loans are secured using a person’s checking account so the money is guaranteed to the lender.
The problem now is that many people are out of work and receiving unemployment check. Although this is steady income and can be relied upon, short term loan lenders are now using this income to provide additional cash to people in form of payday loans. The only difference is that the people are not working and are not receiving a pay check. Instead, people are getting payday loans based on their unemployment income, which means that they are giving people who don’t have a job a cash loan.
The fact is that each state sets their own regulations, and states like California doesn’t require lenders to check for employment to approve the loan. In most states, all that is required to get a cash loan is a banking account and id. Some lenders use Teletrack to approve payday loans, but not all require or use Teletrack to evaluate a person’s ability to pay the loan back.
Although this can be a welcome relief to those that are really hurting for cash and need to get money to stay afloat or gas to get to work, it can also be a huge disaster waiting to happen. People that are not working already and receiving unemployment income are already on a limited budget. Putting added strain on a limited budget by getting cash advance loans are just making the scenario worse and not better, even though it may seem like a smart thing at the time when the cash is needed.
There should be some sort of action in place to ensure that if loans are given to people that don’t have jobs, that certain caps or guidelines are in place to help manage the loan and not let the person get in over their head. In addition, there should be some sort of procedure in place for helping people that are needing to get cash with unemployment checks and they should be regulated in a different fashion than loans made with real employment income.
It’s always best to use payday loans responsibly, only take what can be paid back on time, and to read everything before signing. Cash loans are intended to be last minute or emergency funding and not a long term financial plan for people to follow.
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Payday Loans Getting Approved With Unemployment Checks…
Most of the time, people that want to apply for a personal loan need to have a job and good credit history, or so we thought. Today, there are credit options available that not only doesn’t require a credit check, but also appears to not need a job as…
This is surprising, actually I thought the trend would go in the opposite direction in the wake of the global economic crisis and that there would be more restrictions on loans.
The problem is that people still need to get access to funds and banks are less likely to loan money today, especially to the sub-prime borrowers, which means that their only option is to use services like payday advance loans that don’t require a credit check. I’m sure once bank start loan money more easily to people, and with less risk, there will be more regulations on these short term loans.
This is thought-provoking post, I wonder what will happen if all people rely to this kind of activity? It is stated above that “short term loans don’t have any installment payments so they don’t get reported to the credit agencies, and lenders don’t worry about checking credit history to approve them.” So, this could boost the confidence of credit makers that loaning a big amount of money is not a problem to worry if they can’t pay. This could be the problem!!
Unemployment level is increasing day by day. So this is so useful blog for everyone.
Hopefully the economy will be able to rebound this year and we can start to reverse the unemployment level and get it back down to a sustainable range.
That is certainly the appeal of short term loans, and in fact, the reason many people get them even though there is a higher fee associated with getting a cash advance than with a traditional loan. The short term loans don’t show up on personal credit history so people can get as many as they want and it doesn’t effect their credit. The worst part about this is that lenders are giving these loans to people that are not working and only have unemployment income to count on. This is by far the bigger problem in the picture.
I’ve been thinking that lending institutions are more afraid of those unemployed ones due to can’t even pay their daily needs coz before I’ve been working in a lending institution. Sometimes in this payday loans most of them there are hidden charges. Just a few tips beware of those hidden charges. So we don’t want to be in the middle of indebtedness.
I think it s a good idea for them to start giving loans for unemployment benefits but where can I find a loan place that does that?
Most of the time it’s a brick and mortar store and not the online ones. Online stores have a hard time verifying income from unemployment so they often don’t accept it, but bringing in a copy of the check to a local store can get it approved and there are local stores who approve short term loan from unemployment insurance income.