When you find yourself in severe financial difficulty and are desparate you are in effect at your most vulnerable. You will be tempted by all offers from what is in effect the predatory lending industry that appear to offer you easy cash, quick cash, no bank account needed loans, payday loans and any number of combinations of such lending arrangements. These appear to offer a quick solution to any problems that you are facing and occasionally, very occasionally this is true. But these type of loan arrangements should be treated with extreme caution.
The reason why the industry that is involved in lending money in this way, the reason why there is so much expensive advertising done for such lenders, why they can appear so businesslike and orderly in their initial undertakings with you is that such lending is extremely profitable for those lenders. And when you are in the business of lending, profit comes from only one source, interest rates. The vast majority of short term, payday lenders charge interest rates that to any rational person are almost unbelievable. The reason that they are able to get away with such rates is twofold.
Firstly the people to whom they lend are desparate and whose need of the cash outstrips any concerns about the cost of borrowing that cash and the price that will have to be paid later.
And secondly such loans tend to be very short term in nature, so although the advertised interest rate looks comparable with other more conventional lending establishments the interest rate quoted is not usually quoted on an annualized basis, rather on a simple interest basis. For example you might borrow 1000 dollars now and pay back the 1000 dollars with 10% interest on top in 4 weeks time. 100 dollars for 4 weeks may be something you are prepared to accept, but what would happen if you had to borrow 1100 dollars in 4 weeks in order to pay back the original loan plus interest, at a similar 10% charge. You would end up having paid 210 dollars for borrowing 1000 dollars for 8 weeks. Now if you extend this out for six months the interest charge begins to exceed the total amount borrow, that is an effective interest charge of over 100%. Most people would consider this to be unreasonable and yet these sorts of situations can and do occur all of the time.
So, if you are in a situation where no bank account needed loans, or payday loans are beginning to look attractive, make sure that you exhaust other avenues for borrowing money first, friends, family, your bank, your existing creditors, before you take out loans which may cost you more heavily than you understood.