What is a payday loan?
A small amount usually up to $500 borrowed with interest rates from 10%-30% for every $100 from a legal lender being paid in full amount with the charges at the end of the month or the next salary is called payday loan. It is also called a short term loan because of the length of period it is scheduled to be fully paid.
In the US, some states allowed payday loan as being legal while some other states permit this type of loan with restrictions. Some states also prevented the system.
However, there are certain rules that a lender should follow in order that a borrower can’t be trapped in a loan for another term or in a rolling loan. There is a specific authority that regulates this law to protect the borrowers from high interest rates.
When can payday loans be used?
Generally, this applies to people who need urgent cash because of unforeseen situations that calls for immediate money. Examples of situations like these are house or car repair, bills past due, minor accidents, and other emergencies. Because of these difficult problems and desperation, people often consider taking on payday loan as a solution.
Who can apply for a payday loan?
Any person who earns good paycheck and have a steady job that has an active bank account, pay slip or pay stub, must be 18 years old and above and must have a valid identification and a social security number. The borrower must plan a small amount he/she wished to borrow, so as not to have problems in the future.
How to apply for a payday loan?
Local retail stores. You can choose from any payday loan retail shops or stores and compare for good rates and fees. When you go into a lending store and have all the requirements ready like bank statement, identification and proof that you are currently employed, then your loan will be processed within minutes and the money will be transferred to your bank account in one working day.
Online payday loan services.Applying online is safe, easy and available 24/7. You just grab a smartphone or on a computer anywhere you are or whenever convenient to you and file an application online. After making a decision on the amount and some supporting papers like social security number, banking details and proof of your salary, once approved, the money will be sent on your bank account overnight or you can get your money at any local cash store that is associated with the online lending company. In some states in the US, some online payday loans are available.
Some payday loan companies give good term to borrowers like when you decided not to continue your loan; you have a 72-hour time limit to return the amount borrowed with no charging fees, some doesn’t require good credit or allow rollover and some online lenders give points to those making their payday loan payments on time which gives larger payday loan at smaller rates.
Positive thinking.
In most occasions, people choose a payday loan as the best solution possible when they can turn to no one, when times have been difficult and paycheck is still weeks away. Although, sounds a bit scary because of the imposing threat of overdue loan and additional fees, just have a positive outlook. Some lenders now have followed regulations regarding the charges and fees that protect the borrowers. Just pay on time and have some budget planning so as to cover you until the next payday without pressure.
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