Understanding What Payday Loans Are
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Payday loans are designed to help people who need some extra cash right away, but can’t get a traditional loan from a bank or credit union.
These high-speed loans, also known as cash advance loans or cash advance loans, allow you to borrow up to $1,000 for as long as 30 days.
The money will be deposited directly into your bank account as soon as the next business day.
#1. How do online payday loans work?
It’s very simple.
You go to a payday loan store near you and you fill out an application.
The employee will then examine your credit history and, based on that information, he will determine whether or not you are eligible for a short-term, small-dollar loan.
If you are eligible, he will then give you an estimate of how much you can expect to be loaned. You will then be given a certain number of days (usually 30. to repay the loan with interest.
If you do not repay the loan in full within that time period, the loan company will automatically renew the loan for another 30 day period and begin charging you interest on the unpaid balance.
If you do repay the loan in full, the loan company will write “canceled” on your account and you will no longer be responsible for paying any further interest.
#2. Who can get a payday loan?
Anyone who has a checking or savings account is eligible to request a payday loan.
It’s also possible for anyone who is “verified” to get a loan (see below). Verification is easy and only takes a few minutes.
There’s no verification fee, no credit check and you can get up to $1000… no matter what your past lending history says!
#3. What fees are associated with payday loans?
The fees associated with payday loans may include:
1) Origination fee: This is the fee for providing the loan.
2) Loan fee: This is the charge that accrues each day that you carry a balance on your account (the days between when you take out the loan and when it’s due to be repaid).
3) Payment processing fee: This is an additional charge charged by a lender.
#4. What are the requirements to get a payday loan?
You must be a U.S. citizen, at least 18 years old, have a bank account, and a checking or savings account.
Basically what this means is you can get a payday loan with no job, no income verification whatsoever.
There are many websites that allow you to fill out a form and instantly receive a list of companies that would be happy to give you a payday loan.
You then choose one of those companies and, if they accept you, they will send you a cash advance check in the amount of $100 to $1000.
You then use that money to repay another company or to pay your bills.
#5. Can you get more than one payday loan?
The short answer to the question is: yes. You can get more than one payday loan.
But what should not be done is to take out a second or third payday loan without first paying back the first.
This creates a cycle of debt that becomes increasingly difficult to break out of.
Payday Loans are an Excellent Way to Access Cash Quickly
(When You Have No Other Options)
Payday loans can also quickly drain your finances if you use them inappropriately.
Always remember to consider all of your options before using any type of loan.
As a general rule, the best option for getting emergency cash is to have enough saved to cover at least three to six months’ expenses.
If you don’t already have this amount socked away, you should seriously consider putting something aside on a regular basis.
Having said that, sometimes it’s impossible or extremely difficult to save this much money.
For example, if you have a very low-paying job or are just starting out in life, it may take you years to amass even a small nest egg.
In this case, you may have no other choice but to access a short-term loan.
If this is true for you, use the tips in this article to help make sure you get the most out of your payday loan.