I have used payday loans a couple of times. I am not going into any details on where and how I used them. It should be enough that it supplemented my paycheck which in some cases is not really enough. I am well aware of the fact that online loans can be harmful for a lot of people, especially to those who have low income.

I do not agree with that view, even if those who say so are mostly financial experts. The way I see it it will only become negative if the borrower is unaware of what he is getting into.

Why Fast Payday Loans Need No Credit Check

Traditional lenders require a credit check before they approve an application for any of their financial products. The credit history is a borrower’s performance to do with money and debt management. If he has had any problems paying back anything in the past, then that would be reflected in his credit history. It is so easy to see why that is important to those who are in lending business.

Legitimate payday lenders however need no credit checks on those seeking to make use of what they are offering. They do not really care if a potential borrower has a very low credit score as long as he can meet their requirements, then he gets instant approval for personal loans with bad credit.

Take a Look at the Requirements

• You should be employed.
• You should have a bank account.

Those are the only real requirements that they are asking for. That allows a greater number of people to use instant approval personal loans with bad credit as opposed to those that can be taken out from banks and other institutions. There is also no teletrack, no faxing and no checks involved in the transaction.

The Price for Getting an Instant Payday Loan

All of these excellent qualities would come at a price of course. That comes in the form of crippling interest rates. I cannot hide the fact that the fees which direct payday lenders charge are extremely high. They can be anywhere from 300% to 800 %. Since these are mostly short term loans, the failure to pay might mean doubling or even tripling of what you have to pay in a very short time.

Serious Consequences

The high interest to be paid in a very short period could mean a lot of trouble for some borrowers. Remember that a vast majority of those who resort to these loans online have had difficulties with their finances already, or else they would not have bad credits scores. It means that the borrowers might end up unable to manage the payments for what they have borrowed. They might then be forced to borrow again or to extend the loan. In short they might end up in a cycle of taking out quick cash advance loans to cover for all of their expenses. It would be very hard for them to get out of that situation in the long run.