Frequently Asked Questions Regarding Payday Loans

What is a payday loan? 

Payday Loans

Payday Loans

This is a small loan which can be borrowed to be used in urgent situations when you are for the moment out of cash. Otherwise known as payday advances or cash advances, payday loans are designed to meet quick-fix cash flow needs.

What are the payday loan lending requirements?

The first basic requirement of a payday loan is that the applicant must be above 18 years of age and above.
While there is no credit check needed when applying for an online payday loan, there are some other factors that you must provide. You must provide proof of a valid checking or savings account.
You must also show proof of income and must meet the basic employment status that most lenders want.
Be advised though that payday lenders have different eligibility requirements hence you should check with them for more details as these are just the basics.

What are the costs associated with payday loans?

Typically, lenders will charge between $15 and $30 per every $100 borrowed, with some even charging as little as $11 per every $100 borrowed. If you weigh the pros and cons and decide that a payday loan is what you need, ensure you understand all costs associated with it and ensure you read the terms and conditions thoroughly before you click apply. In some cases you will find that you will incur a hefty amount if you fail to pay back the loan by the agreed date.

How much can I borrow?

Because a payday loan is basically taken against your pay slip, you can get as much or as little as you wish, normally between $100 and $1500 as per your ability to repay back the loan plus interest accrued and also depending on your level of income. A good way to know how much you can borrow is to take your weekly income and then divide it by 3. In other words, if you earn $600 a week, then the maximum amount you can borrow is $200.

How do I apply for a payday loan?

Applying for a payday loan has been made very easy, convenient and fast especially if you follow the paperless loan application process. This is where you apply for the loan online by filling an application form. In the form you will indicate your official details plus the amount of money you wish to borrow. Once you submit the application form, your lender will check the details to validate their authenticity and will respond in a matter of minutes whether your application has been approved or not. If everything falls into place and you are approved instantly, then the money will be accessible in your bank account within 24 hours of approval.

When all is said and done, payday loans are very popular today more than ever before because they come in handy during those emergency times. If you use a payday loan wisely, you can rest assured they are a very cost-effective way of getting access to fast cash to meet emergency cash flow problems.

How to avoid Payday Loans?

Payday Loans

Payday Loans

The unexpected expenses that cannot be deferred compel most of the people to go for quick loans overlooking the interest rates and the consequences involved. Payday loans are the ones that are schemed to help the people in their need for urgent cash until their next payday. The interest rates in payday loans are so high that the borrower’s financial condition worsens if he opts for payday loans for his relief from the financial crisis. Getting trapped in payday loan cycle is very common as the borrower runs out of funds before his paycheck once payday loans are availed.

Better alternatives for payday loans

It is advisable to keep away from bad credit loans if possible. By keeping away some funds every month to help in times of emergency, you can avoid seeking sources of instant cash with high interest rates. The funds thus saved for urgent needs should not be used for purchases that can wait till your financial condition is comfortable. With funds saved for urgent needs, you can stop depending on paycheck alone for the expenses. Once your savings is spent, you should be specific about replacing it. Planning a good budget will help in saving some money every month and in fact savings should be considered in the budget.

Loans similar to payday loans are offered by some of the banks to support their customers in times of financial needs. The fees and the interest rates are not as high as traditional payday loans. Since the banks allow the payments over weeks or months, the borrowers are prevented from getting trapped in the payday loan cycle. It could be learnt from the bank whether you are eligible for any such source, before approaching the payday loan providers. By opting for unsecured loan or title loan, it is possible to keep away from payday loans.

Though the credit card interest rates are higher, they can be considered as better option than payday loans. With the credit card no credit check loans, the payments can be paid over a few months. However, the credit cards are no better if the payments are not prompt each month. Credit cards can be an alternative for payday loans only if you are not able to raise funds through other sources. If you can postpone the purchase, you can do so to make the purchase on your payday, instead of obtaining payday loan to be repaid with high interest on the next payday.

In some of the bills such as medical bills, you can devise a payment plan in which you are not required to pay off the entire bill immediately. There are installment loans offered by loan stores and though these loans are associated with high interest rates, it is easier to pay back than the payday loans. Payday loans look impressive with instant approval irrespective of bad credit score. But, the high interest rates in payday loans are enough to vote against the offer. When an individual is in need of urgent cash, he can make a thorough analysis of the loan options for the prevention of payday loans.

How to Make Sure You Choose a Good Payday Loan

Good Payday Loan

Good Payday Loan

A payday loan can pose problems if you are not careful when choosing the company to lend you money. The most important thing you can do to assure that there will be no surprises, is to do your homework in advance. Talk to people who have taken payday loans and ask for their opinion. Learn from their experience and apply what you’ve learned to your current situation. This inquiry could save you a few good bucks. Take a day or two and just scan the market, see what’s out there and what the best solution is.

We’ve done such a thing and found to offer free service and the lowest rate possible. Be careful with those rates, the annual percentage rates or the APRs – make sure they’re the smallest rates found in the payday loan industry. Once you’ve set your eye on a company, preferably one that accepts online application (it is less time consuming and the money gets in your pocket faster), go ahead and start the process. These online companies offer you an online form that will tell if you qualify and how much money you can borrow, right then and there. So, from the intimacy of your own home you can calculate everything. After you’ve been given the OK, go ahead and choose the type of payday loan you want. You are short on money and can’t afford to pay it back soon, then choose an interest only loan and only pay the small interest until you can afford to pay the entire amount. Take your pick from adjustable and fixed rates – whatever works for you! It’s easy!

Then, once you get the money you can work on that home improvement project you’ve been dreaming about, or pay those pesky bills that have been collecting on the kitchen counter. Or even buy that car radio you desire so much. Nobody is going to tell you how to spend your money, because it is your money and you’re free to do whatever you want with it. All you need is the right information at the right time, as well as to remember you can only borrow money that you know you can pay back. Don’t enter a vicious cycle that will make you a serial debtor! To be frank, there’s no worry that could happen, because payday loans are thought up in such matter that you can’t really borrow more than you can afford to pay back, so relax and just think about how you can improve your current situation.