Life is not all about how wealthy you are, in fact, it has become all about how satisfied you are. As long as you are earning and covering all the expenses, you feel like a lucky person.
However, life is not the same and every day you have to face new challenges.
Instead of going more philosophical, we should get back to our main discussion. Here, in this blog, we are going to discuss the financial challenges in one’s life and the scope of small loans in preventing any tough situation.
Our day-to-day life makes busy us so much that we cannot keep an eye on what’s going on in the lending marketplace. Thus, when any tricky situation arrives, we tend to look to friends or family members for some financial help. It is not wrong to take their assistance but they have their own financial compulsions and there is no guarantee that they provide you required money.
When it comes to guaranteeing, one place where you can expect much-needed help is the FinTech lending place. The lenders here are experimenting with their financial products according to the growing demand for lending options. For example, they are providing guaranteed payday loans with no credit checks.
What is a No Credit Check?
You might be thinking of why this thing is being discussed here. We usually find out that most people are still confused about the concept called ‘no credit check’. Many lenders advertise their products as such but it does not mean that they do not check the credit history and after all, it is against the Financial Conduct Authority.
They actually mean that a soft credit check is done where credit score does not block the chances of loan approval rather the lender will give the loan approval on the basis of the income status or the collateral pledged by the lender.
These loans are unlike hard credit check loans where the lender will reject the loan application once it finds a particular borrower with a blemished credit score.
Payday Loans are More Connected to this Concept
Payday loans or cash advances are small funding sources. People can apply for them during their financial emergency because the lender does not keep any interest in looking at their past credit history.
The loan application can be submitted online or through a text message and the loan provider releases the funds within a few minutes. The biggest advantage of these loans is the easy repayments, which the borrowers can do on their next salary day.
Due to the small amount, the lenders do not feel any risk in giving funds without strictly checking past credit. It is the reason why these loans are more related to the policy of no credit checks. One more thing is that borrowers can also improve their credit rating because the borrowed amount will be repaid on time.
You May Like to Read: Cost to Create a Fintech App
Do Payday Loans Also Available with No Guarantor?
Yes, as the lower risk is involved in payday loans, the lenders have no objection to approving the loan application. Providing a guarantor has been a crucial part of any loan process whether it is online or offline because the presence of that person generates trust among the lenders that they can get loan repayment on time. But the problem of not having a guarantor generally occurs during a financial emergency.
For example, you are driving to reach your destination but suddenly one of your car tires got punctured. If you want to apply for payday loans through a text message then finding a guarantor on that spot would be impossible for you. Lenders understand such compulsions and approve the loan applications without any co-signer.
What else that Payday Loans Bring for People with Bad Credit Scores?
By looking at the uncertainty of financial problems, keeping a good credit record would be difficult. Small problems create a large fuss and sometimes, it becomes difficult to handle. People with poor credit scores generally face such circumstances and later struggle to win the trust of financial institutions. Thus, the demand suddenly increases for those direct lenders, who are ready to provide guaranteed payday loans for bad credit individuals.
By getting specialised loan deals, they can have early peace of mind and there are two reasons behind it:
- Borrowers can secure funds without any issue with their adverse credit background
- Improving the credit profile seems more practical because repayment can be done on the upcoming payday.
In the nutshell, small financial issues can be solved through small funding sources. You just need to be smart enough to use them at the right time and for the right purpose.
One suggestion here is that never apply for an amount that is beyond your repayment capacity. Borrow only for an urgent situation and for living an undisturbed financial life.