Chances are you have heard the term “payday loan” before, but do you actually know all of the details of what these loans really are? It is crucial that you get this information before applying so that you can make the best possible decision. A payday loan can be a real life saver if you are in a tight financial spot, but you’ll need to learn as much as possible first. The more time you take to get this information, the more likely it is that you’ll get exactly what you need.
Payday Loan Definition
A payday loan, which is sometimes called a “short-term loan”, is essentially just a cash advance on your pay check. This means that you will need to pay back all of the money you borrow within a period of no more than 2 weeks. There will of course be interest that you’ll have to pay on the loan, and the rate depends on a few different things. A lot of payday loans offer the option of slightly longer payback periods of up to three months.
Approval isn’t guaranteed
No matter what you may have heard from other people, your approval for a payday loan is never guaranteed. It’s true that a lot of people who apply for these loans end up getting them, but there are still some basic requirements you will need to meet.
Some of the basic requirements to get a payday loan include:
• Being a legal citizen of the country
• At least 18 years of age
• Active checking account at a bank or credit union
• Gainfully employed
When it comes to how much money you can borrow with a payday loan, it all comes down to how much you make as well as what your credit is like. The more money you make from your job, the higher your borrowing limit will be. With payday loans there is typically a borrowing limit of around a few thousand dollars. Some lenders are willing to give out higher amounts than others, so you will need to keep that in mind as well.
Finding the right lender
You will definitely need to take some time to find the right lender to borrow from, because otherwise you might end up getting a raw deal. If you don’t want to pay more than you absolutely have to for your loan, it is crucial that you spend a decent amount of time doing this research. A reputable lender will most likely be able to give you a fairly good deal on the loan you need so you don’t get stuck with lots of extra/hidden fees and charges. There are quite a few shady lenders out there, which is all the more reason to closely review your options before making a final decision.
What happens if you don’t pay back the loan
If you fail to pay back the loan on time, your credit can and most likely will be affected in a big negative way. The last thing you want is such a big strike against your credit, so you will need to make sure that you can pay back the amount you borrow. You may be able to get an extension to pay back your loan, but you’ll be facing some serious additional fees. Once you are late on your loan, even if only by a day, it makes paying it back in full quite difficult. The best thing you can do is to pay back all of the money you borrow by the due date. You should make a point of allowing the lender to automatically take the money from your account on the date your loan is due to be paid back.
Getting a payday loan is a great option for many people, but you will need to arm yourself with knowledge before deciding whether or not to apply. If you have decided to try getting one of these loans, you will be able to fill out an application online. This process won’t take very long at all, and you should be notified as to whether your application was accepted or rejected within 24 hours after submitting it.