Getting A No Verification Payday Loan Can Be Easy - Not Paying It Off Is Hard

Online, June 16, 2011 (Newswire.com) - While it's not necessarily the best way to go, a "no verification" payday loan can provide quick cash for those unexpected expenses, like medical emergencies, or home or car repairs. If you don't have an emergency fund set up, a no verification payday loan could be your only choice.

But what's the difference between a no verification payday loan and a verification loan? Loans that require verification will require proof of residence and income, as well as credit history. These loans draw from your past borrowing and credit histories.

No verification loans don't require any of this, but do make you a higher credit risk because the lender doesn't know anything about you. Because of this, no verification payday loans have much higher interest rates than traditional loans.

Most payday loans work like this: you write a check for the amount of the loan, postdated for the day you receive your next paycheck. You give the lender the check, he gives you the cash or deposits it into your checking account. The day you get paid, the lender cashes your check, unless you roll the loan over, or extend it.

You should be aware that payday personal loans feature a much higher rate of interest, and also come with fees - fees that are multiplied if you extend the length of the loan.

For example, if you get a payday loan for $200, you'll write the lender a check for $225, to include a $25 fee. This means a 650 percent annual interest rate. If you can't pay that loan back, you'll pay the interest, plus additional fees.

The bottom line is this: you should always keep your word and pay the payday loan back in the allotted time. If you don't, the lender will not only continue to charge you fees and interest, but he's also very likely to come after you legally and assess additional fees and penalties.