By Frank Jones on June 21, 2011
.jpg.aspx?width=75&height=75) If you've ever shopped for a payday loan then you may have noticed that some companies offer no Teletrack payday loans. First you ask yourself what exactly is a Teletrack? Then you're likely to wonder if it's better to use a Teletrack lender or not? This all depends on what you're looking for from a payday loan.
Credit Score
Any reputable lender will consult your credit score before deciding your ability to repay a loan. Most will also take this information into consideration when determining the finance charges and interest rate on your loan. Unfortunately, neither of these statements is true of all payday loans. Most, if not all, payday loans have pre-set interest rates and fees which are applied equally to all applicants. This means that a good credit score which may have helped you get a lower interest rate from another lender, will not do the same for a payday loan. Most lenders will use the three major credit bureaus (Equifax, Experian, and TransUnion) when deciding your ability to repay a loan. However, this is not the case for all payday loans. Many of these lenders use another credit reporting agency called Teletrack. Those lenders who cater to clients with the worst credit ratings don't even bother to use Teletrack. This is where the advertisement for “No Teletrack Payday Loans” comes in. These loans are made without any reference to any credit bureau large or small.
Interest Rate
At first it may seem to be a good idea not to involve the credit bureaus when shopping for a payday loan. However, those lenders who don't care about your credit score will make up for it by charging higher interest rates. Normal payday loans can already exceed an equivalent to 800% APR, and no Teletrack payday loans have even higher rates. At these rates you have got to begin questioning if your really need the money. Perhaps there are some more creative ways that you could cut costs and save money you already have.
Fees
As thought the high interest rates aren't enough, payday loans also tend to come with high fees. These fees only get larger when credit bureaus don't weigh in with your past payment activity. Many people fall into a cycle of constant payday loans using the standard payday loan providers. This situation will only be worse with no Teletrack payday lenders who must charge higher fees to makeup for their losses due to defaults and slow or late payments.
Why Bother?
After learning about the higher fees and interest rates on top of an already expensive market for payday loans, it is hard to understand why anyone would accept such a loan. A better alternative is to look for an installment loan which can be paid back over several months or years. The interest rates and fees on installment loans are typically much lower than those of payday loans (installment vs. payday loans). In addition, installment loans can help to build or repair your credit over time.
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