No-fax payday loans allow potential borrowers to apply for unsecured loans online. If the loan is approved, money is transferred into the borrower's bank account, usually within 24 hours. "No fax" implies that applicants do not need to fax pay stubs or bank statements. However, no-fax payday lenders often ask applicants to fax proof of income. Approval is based on the borrower's agreement to allow the lender access to the bank account into which the loan is deposited. Payday lending is a multi-billion dollar industry with a powerful lobby, which means that borrowers with complaints may not have much recourse for satisfactory or fair resolution.
"Payday loan" is a legal term that indicates a loan that exceeds a certain percentage rate. For example, in Kansas, payday loans have interest rates that exceed 12 percent. Payday loans are distinguished by their rapid approval, the lack of a credit check and their rapid-repayment requirement. They are unsecured loans and require that the borrower has direct deposit. Payday lenders can be located anywhere. They operate via the Internet; therefore, privacy can be an issue, regardless of the lender's assurances.
Potential borrowers are advised not to interact with payday lenders. In the first place, no-fax payday loans usually are not faxless. More important, "no-fax" is a marketing device meant to lure borrowers who ought not to receive credit of any kind. Payday-loan websites include disclaimers about the nature of payday loans, warning that they should only be used in emergencies. This, too, can be construed as clever marketing. It makes the lender appear to be compassionate. The best advice is to find money another way. If your income and/or credit history are such that a legitimate loan is not an option, do not borrow.
Payday loans--no-fax or otherwise--carry high interest rates and fees. Generally, the fee is approximately 25 percent per $100. Borrowers must repay payday loans within 1 month. Although extensions are available, they come at a price. In every case, payday lenders walk a fine line between fair practices and predatory lending. States are investigating interstate commerce issues that may be linked to payday lenders. In some cases, the lender may not have a license from the state in which a borrower obtains a payday loan. Additionally, state laws often impose limits on how much interest a lender can charge. There are legalities that are only coming to be investigated, due to the ease with which borrowers and lenders can interact over the Internet.
A payday loan that does not require an applicant to fax proof of employment and income is a loan that has purposefully been made easy. Payday lenders solicit people in lower income brackets who usually need money quickly for emergencies, and who tend to have poor credit. It might be surmised that a no-fax payday loan is designed to more easily draw people into a snare of high interest rates and fees. May the borrower beware.
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