What a Payday Loan is Really All About
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. You can apply online and the money loaned can be credited into your bank account on the same day.
The most common amount lent for first time borrowers is $300 or more maybe depending on your income. You are more likely to be approved the less you want to borrow so it is advisable to borrow only what you need. Once you have successfully repaid your loan they may then offer to lend you more in subsequent loans.
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.
Best Way to 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 lender usually collects your payment by debiting your bank account once your pay is deposited.
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
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 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. As long as you meet their needs they can give you what you want.
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.
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.
Overall payday loans are convenient easy to access and offer a viable option when you need money quickly.