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If it’s difficult to make ends meet each month due to your unforeseen expenses, temporary needs or emergency costs, applying for a payday loan can help you overcome your financial issues.
Payday Loans and Advantages
Payday loans are also known as cash or payday advances. Borrowing a small amount of money to repay on your next payday. There are high rate of interest based on your income and credit profile due to be paid back on or around your next payday.
You can generally borrow up to $500 with a significant fee to cover your unexpected expenses. You can repay your loan with debit card payment, cash payoff, automatic payment from your bank account or a post-dated check.
How To Apply For Payday Loan?
To get a payday loan, you give your identification, banking details and other details to the lender. If you get approved, you receive the money instantly or within 24 hours.
To apply for a payday loan; you have to meet minimum age requirements, you must have a valid ID, you should have a proof of steady income and an active checking number and also a working phone number. You may also apply online by uploading your personal information (full name, address, phone number, social security number, a valid ID number), your income information (income type, employer information, pay frequency, income amount) and your banking information (checking account number, routing number).
Are Payday Loans Safe?
- Firstly, since payday loans have extremely high interest rates, it would be quite difficult to repay and additional fees may lead you to fall into deeper debt.
- Secondly, most borrowers apply for another payday loan to pay off the first one or roll over the loan every week and pay the interest for each week. These moves may lead you to trap into a debt cycle.
Also, if you fail to repay, you may face a court judgment. Instead of applying for a payday loan, you can consider improving your bad credit score by making your payments on time or avoiding applying for new debts. As an exception, you may apply for a credit builder loan.
If you need to borrow a small amount of money to cover your unforeseen expenses or emergency costs, applying for a payday loan can be a good option.
How does payday loans work?
You can borrow a small amount of money quickly to repay on or around your next payday or when you receive your other regular income payment. You can borrow up to 50% of your net monthly pay per loan and repayments usually last 14 to 28 days. The good thing about payday loans is, generally payday loan lenders do not require to do credit checks to see if you are creditworthy. But, you still have to provide the lender some documents. Including the proof of you have been employed for 3 months, proof of your address and your chequing account details. Once you get approve for a payday loan, you sign the loan agreement. And you have a chance to get the loan quickly.
How to get a payday loan?
- Generally, lenders require you to meet the criteria below:
- You must meet the minimum age requirements.
- Have an open and active checking account.
- You must provide the proof of income.
- Have a valid phone number.
Advantages of payday loans
Although most people do not consider applying for a payday loan as the first option. Due to its higher than normal interest rates. Payday loans are still one of the easiest ways of getting quick cash.
There are several pros of payday loans are mentioned below.
- They are fast: Once you provide the necessary documents, you may learn whether you can get. Almost instantly and if you are approve, you can receive the loan you need within an hour. On the same day or on the following working day without filling long forms.
- There are only a few requirements: Most payday lenders do not require credit check or collateral. You can consider yourself guaranteed as long as you have a stable source of income. Even if some online lenders may want to check your credit score. The main focus will be on your current financial situation.
- You can apply online: There is no need to call or set any meetings with a loan officer
- Free use of Loan: You do not need to report a specific purpose. If you can repay your payday loan on time. Next time you borrow you will get a chance to receive a higher amount.
- You can protect your credit rating