The Inside Scoop on Payday Loans
Payday loans are considered unsecure meaning they do not require security or collateral. It is considered a small short-term loan to be repaid on your next payday. You can apply online and the money loaned can be credited into your bank account on the same day.
Generally when you make your first application you can borrow $300 depending on your take home pay. You are more likely to be approved the less you want to borrow so it is advisable to borrow only what you need. Like other lenders once you have established yourself you can borrow a higher amount if needed the next time.
Who Can Apply for a Payday Loan?
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. You should be able to get the money even with a poor credit history if you meet the above criteria.
How do You Repay the Loan?
According to the contract you repay the principle plus interest on the date agreed upon. The repayment date is usually your payday hence the name payday loan. The repayment may be collected by debiting your bank account on your next payday.
Repayment Over a Longer Period
Payday loans may be extended if you find yourself in a position to be unable to satisfy all of it on the repayment date. 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
Eligibility: One of the benefits is the speed at which the cash can be credited to you. The money you need can be available to you in your bank account the same day you apply. This can be very helpful if you have a short-term cash flow problem and need money right now.
The application process is very simple it takes a few minutes to apply and you do not have to waste time posting or faxing documents to the lender as you would with a bank loan for instance.
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. If you meet the application criteria you have a good chance of getting the money.
The reason payday loan businesses seem to be everywhere is because they can meet the needs of people who do not meet the criteria of the banks plus banks will not lend small amounts for any reason.
Many people do not have access to credit cards or traditional loans so the convenience of a payday provides options you cannot get elsewhere.
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.