Common Questions About Payday Loans
Sometimes, people are confronted with situations where they need a little bit of financial flexibility. Unforeseen financial problems occur every day to people everywhere. Whether
Sometimes, people are confronted with situations where they need a little bit of financial flexibility. Unforeseen financial problems occur every day to people everywhere. Whether they’re dealing with a medical invoices from a car accident, debt from college tuition, or bills from an expensive vacation, a little bit of extra money is often necessary.
One of the easiest solutions when trying to find extra money is a short-term loan. These are loans you can get from a direct lender, rather than from a bank, and include car title loans, installment loans, and payday loans. A payday loan, also known as a cash advance, is one of the most common loans offered by direct lenders. If you need additional money to deal with your finances, read on to learn more about payday loans.
What Is a Payday Loan?
Payday loans are short-term solutions that can bridge the gap between paydays. You can borrow money from your next paycheck today by using a direct lender as an intermediary. For a fee, you can take out a loan in an amount that is within your budget, and then repay it when you get your next paycheck.
How Do I Qualify for a Payday Loan?
In the U.S., many states have different laws concerning payday loans. Generally, when you get a loan from a bank, you have to show reliability through your credit score. For many people, this requirement blocks them from getting approved, as they have bad credit due to various, unavoidable life circumstances.
To qualify for a payday loan, all you need is an active checking account, proof of income, and a state issued ID.
How Big Can a Payday Loan Be?
Payday loan amounts usually based on two factors: your income and your state’s laws. In some states, California for example, the maximum amount for a payday loan is $300—no matter your income, you won’t be able to take out a larger amount. In other states, like Florida, the loan amount can be as high as $1,000.
In states with larger maximum loan amounts, the lender will usually do an assessment of your income and checking account to determine the loan they’re willing to offer you. The loan is almost never larger than the amount of your next paycheck, as this kind of loan is borrowed against the sum of that check.
Each direct lender will probably assess you differently and offer you different loan amounts. To help secure a loan you can pay back easily, explore several lenders in your area. Choose the one with the best offer and the lowest fees.
How Much Does a Payday Loan Cost?
The fees charged for payday loans differ from state to state and from lender to lender. Most of the time, the fees are charged based on the amount of money you borrow. To protect customers when they take out a payday loan, all direct lenders must comply with whatever state laws have been put in place.
How Long Does It Take to Apply?
Applying for a payday loan is easy once you find a direct lender you trust. The loan application is only one page that includes your personal information, contact information, employment information, and bank information. Once this page is filled out, most lenders take just a few minutes to review and approve the application. Often, if an application is approved, you’ll receive cash in-hand or the amount deposited into your bank account that same day.
When Do I Have to Pay Back the Loan?
Since payday loans are based on your paycheck, they’re due the day after you receive the check. From the day you take out the loan, the longest amount of time before repayment is necessary is 14 days. Each lender has their own repayment process and late payment fees.
Can I Take Out More Than One Payday Loan at a Time?
In most states, you can only take out one payday loan at a time. This is usually done by the states to protect you from amassing too much debt. While direct lender payday loan fees a pretty small amounts, over time they can add up.
What is a Payday Loan Good For?
Payday loans are great for people looking for a little financial freedom, but they’re only recommended as a short-term financial solution—paying off a bill, for example, or making a large purchase. If your financial need is greater than what a payday loan can provide, you’re better off pursuing a long-term solution, like hiring a debt settlement service or making hard cutbacks to your personal expenses.
Can a Payday Loan Help Me?
Depending on the financial need you find yourself in, a payday loan from a direct lender might be your best way out. Reach out to lenders in your area today to see whether a payday loan would be right for you.