The Inside Scoop on Payday Loans
A payday loan is an unsecured loan not dependent on collateral such as a car. It is considered a small short-term loan to be repaid 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. 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 bank account with a valid debit card. 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
You will need to repay the loan amount plus interest on the date specified in the loan agreement. 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.
Loan Extension Requests
If something comes up and you are unable to repay the loan on time you can ask for an extension. If you find this necessary you will need to contact the agency to explain the situation and ask for an extension.
What are the Benefits of a Payday Loan?
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. This is because payday loan companies do not make their decision to lend solely based on credit history. 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.
To Wrap This Up
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.