Are All Payday Loans Unsecured Payday Loans?


Unsecured Payday LoansBy its very definition a payday loan is an unsecured payday loan. If you have to put up collateral it’s technically not a payday loan. Your job is your collateral. Your paycheck is your collateral. That’s why payday lenders say they’re high risk lenders, because nothing tangible is backing the loan.

If you get fired, laid off, or quit your job, the payday loan company doesn’t have anything they can claim to get their money back. Their best hope at that point is that you’re able to find another job quickly so you can pay off the loan. They can take legal action if they choose to, by taking you to small claims court in your local area. In these instances it’s very rare that a judge would rule in your favor, since the payday lender will have the documentation on the loan agreement whereby you promised to pay back the loan plus the fee.

So yes, all payday loans are considered unsecured loans. But there are a few types of loans that you may be eligible for, instead of getting a payday loan if you do have some things of value. We’ll discuss those below, and we’ll also consider what to do if you don’t have a job and need fast cash.

Unsecured Payday Loans Defined

A secured loan means that you have something of value that can be sold or seized in order to pay off the debt. A home loan is secured by the home, an auto loan is secured by the car. A personal loan is typically not secured, but requires good credit with a strong repayment history, where your good name is the collateral. With a payday loan they throw all of that out the window because they realize there are a ton of people that don’t own their home, already have a car loan to pay, and can’t get a personal loan from the bank due to bad credit. So they developed a system whereby they’ll loan to you with no other major requirements than having a checking account and a job with regular income.

Title Loans

If you have a qualifying vehicle some payday lenders also offer title loans. This allows you to get higher loan amounts, and a longer time to pay, but also it’s not a payday loan by any stretch of the imagination, and the car acts as security of the loan being paid. Many people either find themselves upside down in their car, or have other liens on it that make the vehicle ineligible for a title loan. Or they may not like the idea of losing their car if they can’t pay the loan back. From a borrower’s standpoint these loans are riskier than a payday loan, and aren’t worth the extra hassle.

Sell Gold and Silver

Many payday lenders also have it set up so that they can buy your gold and silver. This can be a better way to go than taking out a loan, especially if you don’t need that much money to pay off your immediate expenses. You can also consider pawning other valuables as a way to get some cash coming in. Most pawn shops will give you the option of pawning or selling your items. If you pawn them they’ll hold the items until you pay the money back, and if you don’t pay the money back they’ll sell them to recoup the expense. They won’t give you anywhere near what the items are worth, since they need to make a profit if you don’t pay your loan back.

Any Other Unsecured Options?

If you don’t have anything of value that you can pawn or put up as collateral, and you don’t currently have a job, there aren’t too many ways to get money, and you should up your efforts to get a job as soon as possible. The only drawback is that payday lenders are going to need to see a pay stub for you to get a payday loan, so it will be a week or two into the job before you can start leveraging the fact that you have a job.

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