The number of customers taking payday loans, as well as payday lending companies, are continually increasing.
Definition of a Payday Loan
A payday loan is a very short term loan. Usually the term is 1-2 weeks. There are other names for payday loans like - “Cash Advances”, “Paycheck Loans”, “Check loans”, and “Payroll Advance Loans”. After you get your paycheck, the loan is to be repaid. If you can not repay the loan amount plus lender’s charges on your payday, you can rollover the loan amount by paying extra fees to the lender and pay the interest along with for the rollover charge.
Necessity for Payday Loans
By the end of the month, you may face some problems in meeting some urgent family expenses like paying your medical bills, phone bills, electric bills, rent or some other utility bills. This usually happens when you fail to maintain a proper budget or you did not keep your expenses under your income limit. Hence in order to meet such urgent expenses you may need a payday loan.
Payday Loan Companies
There are many companies who are promoting check cashing facilities online. Some banks and other financial institutions also will provide you with a payday loan. You can apply online for a payday loan (Top 5 Sites) or you can physically visit an institution.
Eligibility
Conditions to be satisfied to get an instant payday loan are usually:
1. You must have a job or other regular source of income.
2. You must have a checking account.
3. You must be an US citizen.
4. You must be at least 18 years of age.
5. Your monthly income must be at least $1000 Per Month.
Best Time to Apply
The process is very simple. In general, you will get your loan amount within 24 hours of application. The company will check your documents and verify your data with an automated system called VPN Based Software and then approve your loan. The entire process of verification of your identity and depositing the money to your checking account takes around 24 hours. There are some companies who will deposit the cash in less than 24 hours.
If you apply for the loan on Monday, Tuesday, Wednesday or Thursday, you will get the loan on the next working day. If you apply for the loan on Friday, then you will get the loan on the following Monday If you apply on Saturday or Sunday, you will get the loan on Tuesday. So the best time to apply for the loan is Monday thru Thursday.
Costs
Usually a payday loan company charges $15 to $30 per $100 borrowed. So, if you borrow $100, you will have to repay $115 to $130 on the very next payday. The interest rate of payday loan cash advance can be up to 391%.
Maximum Limit
If you are taking a payday loan for the first time, you may get up to $500. After you repay your first loan amount on time, you can usually get more than $500 when you revisit the company for subsequent loans.
Things to Consider
1. You should keep in mind the interest rate of the loan before taking it. You will want to find a company which is charging a lower APR than its competitors.
2. You should take care about the privacy of your documents and information. Look for a company that processes the applicant’s information on an encrypted web site.
3. You should read the company’s policy and legal notices before submitting an application.
Repayment
The lender will deduct the money from your checking account on your paydate. If you fail to repay the loan on the scheduled date, then you may have to ask the lender to rollover your loan amount.
Alternatives to Payday Loans
If you don’t want to pay the high interest charges associated with a payday loan, you might want to look to friends and family first. However, in some cases a payday loan may be a good thing if you need to meet a temporary emergency.
