Payday loans are the cash advances given to the people and should be repaid on their next payday. These are the short-term loans that are credited to the borrower; here the borrower needs to write a cheque for the amount they borrowed with its interest and other charges added onto it. Most lenders will make their borrowers sign over the cheque digitally in order to get access to their bank accounts either to deposit the specified cash or to receive automatic payment from the borrower on their payday to repay this loan.
The loan term period of this loan ranges from 14 to 31 days; the amount on this loan depends on the borrower’s income level and state legal maximums. It provides a financial solution to cover your short term emergencies.
Requirements: Acquiring this loan is very simple and easy. It needs only minimum eligibility criteria, such as:
- Borrower should have a steady source of income
- Valid bank account
- Residential of the state
- Proof of income
- At least 18 years of age
No credit check: The approval process for this loan does not require the borrower’s credit check, but most other lenders would evaluate the borrower’s eligibility and the repayment capability by considering their credit score.
No Collateral: No personal property is required to get cash with this loan; it doesn’t even require any faxing of your documents. You only need to carry a specified list of documentation, such as personal identification proof, Paycheck stubs, personal cheque, etc.
Advantages of payday loans: Though the APR on this loan is very high, it is quite useful for many people who are struggling in between their pay days and find themselves unable to fund a sudden emergency situation. There are no lengthy procedures, unlike the ones that the traditional banks follow. Here are a few advantages of using this loan:
- Salaried people can get quick access to cash to fund any kind of unexpected emergencies
- The loan sanctioning procedure is very simple
- Even a borrower with poor credit history can acquire this loan
- People who have filed for bankruptcy can also get this loan
- Provides cash when borrowers require immediate money in order to meet financial emergencies
Fees: Fees associated with this loan would depend on the lending company, the size of your loan and your state federal laws. Failure to repay this loan leads to a negative impact on your credit report, and could add up very fast with higher interest rates and additional charges.
Payment arrangements: Some lenders provide the opportunity of repaying the loan early by refunding part of your loan fee and some extend the loan period upon the borrowers request, if they are unable to repay the loan amount within the due date. Research well; make sure you find a legitimate payday lender and flexible repayment options.
About the Author:
The guest post was contributed by Alicia, financial guest blogger from Manchester, UK. Find out more about her finance related blogs at financeport