Payday Loans

Have you been stuck with a situation requiring urgent money? Perhaps your car has broken down, or you have faced unexpected bills—yet you don't have enough funds to solve the problem while your salary seems so far away (though you’ll have it by the end of the month). Payday loans are what you need to consider in such cases. Though these loans are available in only small sums (up to $1,000), they may help you get out of a sticky condition. The greatest advantage of this type of loan is the fantastically short time necessary for having your application approved. In as little as 15 minutes, you can have the money you need. Check out whether you’re eligible for payday loans.  

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The essence of a payday loan

This alternative type of credit is designed for those who don't have crystal clear credit histories, yet who need money urgently. If you’re not eligible for traditional loans banks offer at lower interest rates and APR, and applying for a payday loan may help greatly. This way you’ll get up to $1,000 almost instantly after you have applied for it. Yet, the APR will be much higher, and the repayment term might stretch between a week and a month. However, as every state has its regulations, be prepared for different payday loan interest rates.

The impact of payday loans on credit history

As a rule, payday loan lenders are not inclined to send the information on their borrowers to the three major credit reporting agencies of the country (TransUnion, Experian, and Equifax), yet smaller agencies will definitely get it. So, if you borrow a payday loan, don't repay it on time, and expect your credit history will not be affected, you’re mistaken. The lender may even take legal action to recover the unpaid loan. Hence, whether you apply for a payday loan or choose a prestigious bank to get a credit, repaying on time will save your credit score.

How to get approval for a payday loan

Quite often people who have applied for a payday loan are restless at the end of the day and can't find out whether their application was approved or not. Surely, the best way is to be patient and wait until the time for the answer comes. Let's find out the main criteria that guide lenders:

1.     If you don't meet the minimal criteria for eligibility (such as age and residence) set by the state, there’s no sense in applying for a loan, as it will by no means be approved.
2.     Is your credit history in a good status? Surely, there are lenders that don't get hung up on credit scores—yet the vast majority do pay attention to it. Before applying for a loan, find out in which category of lender yours belongs.
3.     Having an active banking account is another point to pay special attention to. This will be required for transferring the funds to it.
4.     The status of employment is the next determining aspect. Most lenders check whether the applicant is able to repay the money or not, and only then make the verdict.

The charges

There’s a fixed fee on every loan. Depending on the state's regulations, the amount charged per $100 may vary from $10 to $30.

Other charges

1. When the borrower takes another loan prior to repaying the previous one, he may easily get into debt. The key is that the first loan is to be thoroughly repaid with all the fees plus the new loan with its fees.
2. Debit cards provided by lenders may be a real cheese in the trap! Many lenders offer these cards to their borrowers through which the latter get the funds required. Before you sign up for a debit card, check out whether there are application fees, monthly fees, or payment fees charged for using the card.
3. If there are fees to pay, make sure there’s enough money in your bank account till that day comes. Otherwise, the bank may authorize the payment of the fee yet charge you a bigger fee!
4. There’s also a fee type set on returned checks.

The pros and cons of payday loans: consider before applying

1. The first benefit of online application for a payday loan is its convenience and simplicity. There’s no need to leave home, stand in queues at banks, and deal with multiple complex documentation to get the funds you need. Today, you can already visit the website, fill in the easy application, and leave your electronic signature.
2. The quick turnover time is the next “pro” of online payday loans. Not only does it take several minutes to have your application sent to the lender, but also takes several minutes to find out whether your application was approved or not. If yes, within one business day the money will be transferred to your bank account.
3. Various ways of getting the loan attract numerous borrowers in payday loans. Today, lenders have both online services and physical stores. It’s upon the applicant to choose whether he’ll get the money sent to his bank account, get a check, get a debit card or even in cash.
4. What concerns the disadvantages of payday loans, the major one is definitely the high-interest rate. The APRs are high, too, reaching up to 300% depending on the amount required and the repayment terms.
5. The Internet is filled with unreputable lenders who make doubtful operations that bypass state regulations. If you have faced one, don't hurry with the allure of superfluously generous offers; instead, verify their legality by contacting your state’s Attorney General.
6. Payday loans are an easy way for people to fall into debt. Before you determine to apply for one, make sure you’re able to repay it.

The repayment of payday loans

The process of payday loan repayment depends on the lender you’re borrowing the loan from. As a rule, an ACH authorization is to be provided to the lender so that it can take the repayment money from your bank account. Make sure the amount is on your account by the due day. If the lender has a physical office, then you can write a personal check and take it there, too.

Guaranteed loan: reality or myth?

Many lenders operating nowadays announce certain "guaranteed payday loans" that may create a false impression they give the money required without paying attention to any criteria. In reality, every lender needs access to the applicant's income, credit score, etc. Therefore, don't live with illusions. Ensure you meet all the criteria before applying for a payday loan.

When payday loans are to be repaid

The deadline for making the repayment is again determined by the lender. The normal payday loan term stretches between two weeks and a month. Hence, the first payday is the day for covering the entire loan. If you need your loan on a longer-term basis, consider applying for a bad credit installment.

Payday loans in case of emergencies

Life is filled with surprises, and not all are pleasant. Most often unexpected expenses knock on your door while your bank account is empty. Particularly for such cases, one can apply for an emergency payday loan.

Rollover payday loans

Whether you can apply for a rollover payday loan or not depends on your state's regulations. The waiting period is determined particularly by the state rather than the lender.

The frequency of taking payday loans

Taking payday loans repeatedly may draw you into debt. However, if you need to take them frequently and find you can repay them, the state determines your right to allow you it or not is determined by the state.