The Inside Scoop on Payday Loans
A payday loan is an unsecured loan not dependent on collateral such as a car. They are short term loans meant to be paid back in a few days usually on your next payday. Most of these loans can be applied for online and when approved the money is usually deposited into your bank account.
The most common amount lent for first time borrowers is $300 or more maybe depending on your income. Approval rates are best when you ask for the minimum amount of $300 so it is advisable to only ask for that much the first time. Like other lenders once you have established yourself you can borrow a higher amount if needed the next time.
Requirements for Payday Loans
Eligibility for a payday loan is that you have been employed for at least three months and you are 18 or older. You must also have a valid debit card for your bank account. Even if you have bad credit history you should still be able to obtain a payday loan if you fulfill the above criteria.
How do You Repay the Loan?
According to the contract you repay the principle plus interest on the date agreed upon. Your next payday is usually the agreed upon date which is where the term payday loan comes from. The repayment may be collected by debiting your bank account on your next payday.
Repayment Over a Longer Period
If something comes up and you are unable to repay the loan on time you can ask for an extension. If this happens it is recommended you contact the lender and explain your circumstances so they can explain your options.
The Benefits of Payday Loans
Approval Rate: Most people like how easy it is to get the money they need. Cash is usually deposited into your bank account the same day you apply for the loan. This helps relieve any stress related to a lack of money in the moment.
Applying for a payday loan is quick and easy and only takes a few minutes to fill out the form without wasting time going back and forth with faxes or emails.
Bad Credit: These types of loans are designed for people with poor credit. Reason being the payday loan firms will lend money based on you meeting their lower requirements. As long as you meet their needs they can give you what you want.
For many people a payday loan may be the only way they are able to get credit especially in current times where many lenders are unwilling to provide loans never mind to a person with poor credit.
There are a lot of good people who do not have a credit card or established credit so they use payday loan companies to help get them through a tough time.
All in all getting a short-term loan is easy and convenient giving you access to money when you need it without the hassle of getting rejected at the bank.