Risk of a payday loan without proof of income
The payday loan without Receipt of Receipts is one of the most wanted in its category. No wonder. The companies that offer these services are numerous on the Czech market. Through offerings and ads, non-bank companies are fighting for a customer and are trying to get the most out of it. Is borrowing money without proof of income really so easy, or does it have any hook? We have prepared a small overview for you.
It is not difficult to borrow today. Ads report that you get money almost immediately, just click. In particular, non-banking companies boldly report this trend and promise money quickly and without risk. How is it possible to obtain a payday loan without proof of income when the Consumer Credit Act imposes an obligation to verify the income of each applicant? And is that at all possible?
Marketing vs. reality
It is a well-known fact that we are “attractive” at first glance. Nearly everything is allowed in marketing. Individual companies can therefore name their products as they like, a “non-income statement” payday loan. In reality, however, each applicant must be verified and must therefore document his income – most often through a statement of account. The absence of confirmation of income from the employer allows non-banking companies to use the term “payday loan without proof of income”.
For whom are payday loans without a registry?
The absence of confirmation from the employer is mainly aimed at people who do not have a classical employer. These include, in particular, those who do not currently work (mothers on maternity leave, people in short-term convalescence), people who work for a short time as self-employed, students using a job agreement or a person receiving some form of retirement or social benefit.
These people usually have not got enough credit at the bank. However, for the needs of this type of payday loan, it is enough to extract the account and prove that the money will always come to the account. The maturity of payday loans without a registry is usually short, so it does not matter from what source the regular income comes from. Let us now look at what these payday loans are.
What does “non-receipt of a payday loan” mean?
As a rule, these are small short-term payday loans in the order of thousands of crowns. Larger non-bank companies offer payday loans in the hundreds of thousands.
Small payday loans without a registry are very quickly settled, but quick repayment is also required, usually within 30 days of providing money.
The installment is usually one-off, from ten thousand crowns it can be divided into two or more installments. Therefore, there is no need to further investigate the applicant’s income.
Advantages and disadvantages
Each coin has two sides and it is not even the case for this type of payday loan. payday loans without proof of income can be a solution for a short-term money failure. The main advantage is that the applicant does not have to document his income with a dump from the employer. Simply reach the selected company online and ask for a certain amount of money. Subsequently, it will fill in the personal data, the required amount, the due date, or any other information required by the non-banking company. Then you just have to wait for the notification to complete the application. It is also suitable for people who need money really quickly and without unnecessary delays.
Now we turn the coin and see what the three biggest risks are in these payday loans. The first is higher risk of rejection. Most companies use automated tools to assess the application on the basis of several identical criteria. If you are a supporter of an individual approach, look for another type of product.
By not requiring companies to verify income from the employer, they are at greater risk. This is usually offset by a higher interest rate.
But what do you care most about? Of course, this is a risk of being unable to repay such a payday loan. Often non-bank companies offer this kind of product for free. So what you will borrow, you will return in a month and do not cost an extra crown.
However, if you take this kind of payday loan from a classic, the price is dizzily high. Fees and interest are growing every day, and the APRC is spinning in thousands of percent. The biggest problem arises if we can not make a small payday loan at the agreed time. Thanks to the set RPSN, the amount of debt increases every day. The debt spiral is spinning at a dizzying rate that low-income people get very hard.
The Council concludes: A non-income claim should be avoided by applicants who have no or only a very small income. Beware also of the type of contract you have signed. An unclear contract can confuse the borrower and easily get into default with repayment. Contracts are breached by penalties, which are usually very high. payday loan without a registry is not a solution if you have a long-term lack of income. In Financial Awareness Councils, people who have taken advantage of a quick payday loan without a registry often end up.