A Payday loan (also called a Payday advance) is a small, short-term, loan secured against a customer’s next pay check. The loans are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Pay day advance loans rely on the consumer having previous payroll and employment records.
How much does it cost?
The fee on a payday loan is usually $15 for every $100 borrowed. So if you loan $400 you will be charged a $60 fee, and when the loan term is up (in 14 days) you will be required to pay a total of $460 back to the payday lender.
How do you get a payday loan?
You can apply for a payday loan from a payday lender online or in a shop. To get a payday loan you simply have to prove your identity and show proof that you have a regular income. Once approved for the loan, the money will be deposited into your bank account or you will be given a check or cash on the spot. The ease, speed and convenience of getting a payday loan makes them very inviting.
Can I get a payday loan if I have a bad credit score?
Yes. Most payday lenders don’t check your credit score. So you can get a payday loan even if you have a bad credit score.
How a payday loan works
Here’s how the payday loan process works:
- You apply for the loan online or in a shop.
- You agree to pay back the borrowed amount plus the fee on your next payday. Most lenders will require you to give them your bank details so they can automatically deduct the amount from your bank account on your payday. Or if you apply in a shop they will have you write a check for the amount and agree not to cash the check until your next payday.
- The lender deposits the money in your bank account the next day, but sometimes on the same day, or hands you cash or a check if you applied in a shop.
- On your payday the lender debits your account for the total amount of the loan plus the fee, or cashes the check.
- If you can’t afford to pay off the loan plus the fee on your next payday you can rollover the loan and extend it for another 14 days for another fee. But this can get very expensive.
TYPES OF PAYDAY LOANS
You are probably aware of the payday loan industry, but are you aware that there are various different types of payday loans available? If you are not, then you should read on. Below we will cover a couple of different types of loans, giving you the knowledge that you will need to make an informed choice.
Bad Credit Loans
Bad credit loans are short term loans of small amounts of money. You can easily get these loans, as the companies that offer them are used to working with people that do not have good credit. Because the loan amount is small, companies that offer these loans are not scared of losing the money as larger companies often are. Instead, they can step in and help when larger companies and banks have told you no. This gives you the chance to catch up and get on top of your financial situation, enabling a better future.
Faxless Payday Loans
Faxless payday loans are one of the newer forms of payday loans available to consumers today. These loans are entirely paperless and they often take little or no time to obtain. All you need to do to get one of these loans is go online from the comfort of your own home, and fill out an online application. In as little as a few hours, your application will be reviewed and approved. You can then expect the loan amount to be automatically deposited into your checking account in as little as 24 hours, and usually not more than 48.
Instant Payday Loan
Instant payday loans are great for people that find they need some cash right away. Anyone who meets the minimum qualifications will be automatically approved, allowing a person to draw on the money very quickly. This is a great alternative to waiting a few days, especially if you need to pay a bill or take care of something extremely urgent. This type of payday loan is one of the most popular because when people find themselves in an emergency, they generally need money right then.
Overall Cash Advances
While there are many different cash advances out there for consumers these days, you will only be allowed to have one out at any given time. As this being the case, you need to make sure to research different companies and what they offer before you settle on the loan that you will apply for. They are not hard to get, but you may end up saving money and time by applying for and obtaining the right loan.
5 Easy Payday Loan Tips
Apply in the morning:
The earlier in the day you apply for a payday loan the better. Most lenders start closing their day around 12PM, and if you want your money fast – apply as soon as you wake up. This will give you a better chance of getting approved for a loan, and getting your application in for same day wires.
Apply Early in the Morning:
We really want to stress this point. Most Payday Loan lenders have a daily limit or cap, and after they fund their quota of loans for the day there do not take any more applications. This means your loan request will not be presented to the lenders that are done looking at new customers for the day. If you apply to late in the day it limits your chances of getting a loan, because the more lenders that look at your payday loan request , the better chance you have of getting a loan.
When applying for a payday advance, we recommend that you fill out the application correctly. Do not leave out important information or try to mislead the lenders in any way. Remember, we are still in an economic downturn, and lenders are looking for any excuse not to fund your loan.
Tell the truth, your information needs to make sense to the lender, remember they want to help people with less than perfect credit: So don’t lie about your income, time at job, time at bank, or any other important underwriting criteria. They will figure it out, and you may destroy your payday loan credit history in the process and never be able to get a loan again.
Sell Yourself to the Lender:
There are still quite a few lenders that will call you on the phone to verify and then fund your application. If you have positive information about yourself let them know, they could still be on the fence. Tell them anything that will help your case, they will be more likely to make sure to fund your loan fast, and increase your loan amount.
If you can’t pay on time, let the lender know:
The truth is the payday loan business is over 40% collections, and lenders understand that. If you fall behind, you need to let your lender know. “They will work for you”, they are used to this. It’s no problem you just need to let them know and make arrangements to pay.