The write-up explores the feasibility of same day loans for the unemployed. These work in the following manner.
No fax payday loans are meant for people who do not have a good credit rating and are unable to provide any collateral or fax the necessary documents for availing them. Borrowers are expected to provide proof of age, address, identification, Social Security Number or Individual Taxpayer Identification Number, and also fax pay stubs to avail of them. However, lenders who provide such assistance are more than willing to lend money to borrowers, even in the absence of the aforementioned documents.
A few lenders are believed to be extending same day loans for the unemployed. This assistance is modeled along the lines of no fax payday counterparts. They are sanctioned by lenders to borrowers who do not have the prerequisites for availing one from traditional lenders. The confounding question surrounding these loans is: are lenders dealing with borrowers who may never be able to repay the borrowed sum?
A same day cash advance is a blessing for people who need money for meeting unforeseen expenses. The borrower is expected to be at least 18 years of age, have a checking account that has been active for the past 60 to 90 days, and provide the checking account number to the lender. The consumer is expected to fill out a simple application form that is processed within an hour since there are no accompanying documents that need to be verified.
In other words, the process of availing a loan becomes simple since the lender does not have to check the authenticity of a horde of documents. Generally, the borrower is sanctioned up to USD 1500. This amount is deposited directly in the borrower’s checking account and has to be repaid within 30 days. However, he has to contend with harsh repayment terms since the lender assumes a greater deal of risk by providing cash advances to the unemployed.
These are sanctioned to unemployed people even though they do not have a job or collateral. The prospect of the borrower getting a job within 30 days, in an economy where unemployment is at an all-time high, is really bleak. In case the borrower is unable to get a job, he/she would be forced to roll over the loan. Rolling over is possible if the lender agrees to extend the repayment period. However, this facility comes at the price of a high rate of interest. In other words, the annual percentage rate (APR) that is charged by the lender is exorbitant.
In fact, the APR is higher than the one charged by the lender on payday loans. This is because, in the case of the latter, the borrower at least has a job, and the money that is lent is loosely secured by a post-dated check, which the lender en-cashes, the day the borrower receives his/her paycheck. Given that the rollover rate is very high even in case of payday loans, it is but natural that the same day loans have a high default rate.
People who have a job may be better-off opting for payday alternatives since these loans can help borrowers break the cycle of debt. In the current scenario, availing same day options is not advisable; people should focus on getting a job.