Essentially, payday loans are emergency funds that borrowers are typically required to repay to lenders with their next paycheck. Payday loans do not need collateral of any kind, a good credit score, or a legal employment history like conventional bank loans do.
A payday loan, in some states, is also referred to as payday advance, which is a small loan typically repaid within a single pay period but not more than one month. It is for borrowers seeking some money to cover their immediate or emergency need for funds. They are often paid back on the next payday. Payday loans are fee-based loans. You will know the exact amount of your loan fee before accepting your loan offer. The loan and fees are to be paid in full when the loan is due.
There are many situations that can put someone or a family in a tough money spot. And most people cannot use traditional sources like bank loans for these situations even if they could qualify. Traditional loans require good credit and take weeks or more to process. No help in a tough money crunch when you need help now!
Missing a payment could result in large penalties or a repossession such as your car or major appliance. In this case the fees you pay on your payday loan may be well less than the cost of missing the payment. This is especially true with utility bills and checks that may bounce if not covered at your bank. NSF fees are $35 a check and utility companies are infamous for excessive penalties, new deposits and fees, restart fees, etc. that can add up to hundreds of dollars.
When you hear the term payday loans, you probably think of getting emergency cash when you need it most. And you would be right. But there are a number of ways you can use your payday loan. In fact, you can use it anyway you want to.
Each year millions of Americans have some kind of financial stress or difficulty. And many have no ability to get standard credit or loans from traditional sources. In fact, less than half of all people have access to traditional lending options.
The most important factor in approval is your recent and future income. So be sure to provide accurate and true information. Any misinformation will potentially disqualify you from being approved for a loan. Lenders are not worried about your poor credit as most applicants have some credit issues.
All in all, the data shows that most Americans have more or less similar preferences for payday loans regardless of where they live, their ages, and their incomes. The only real variations were the underlying reasons that encouraged them to request a payday loan. However, almost all grounds were legitimate and not frivolous.
Some states limit the number of payday loans you can take at the same time. It is advisable to repay the first payday loan before applying for the second one.
Before requesting for payday loans online, you must know when the loan repayment is due and whether you will be able to pay back the loan amount on time. You should determine how much money you need for covering your emergency expenses and only borrow that amount. The more money you borrow; the more lending fees you have to pay.