What a Payday Loan is Really All About
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. 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. 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?
To be eligible for a payday loan you must be over 18 and employed for at least three months. 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.
How do You 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 this happens it is recommended you contact the lender and explain your circumstances so they can explain your options.
What are the Benefits of a Payday Loan?
Approval Rate: Most people like how easy it is to get the money they need. The money you need can be available to you in your bank account the same day you apply. 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. 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.
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.
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.
Overall payday loans are convenient easy to access and offer a viable option when you need money quickly.