At one point or another in time, you’ve probably needed money in a hurry, especially if it’s not time for your paycheck yet. Getting an online payday loan or cash advance is one of the options you have.
What is a Payday Loan or Cash Advance?
Simply put, it is money borrowed that is to be paid back when you get your next paycheck at work. It is not issued the traditional way which is through a bank or other financial institution. Usually, this type of loan is issued through loan stores. The borrowed funds are typically are due and payable on your next pay date. The amount of the payday loans vary but are typically small like only $200 to $1000 depending on the state you live in. In some cases, you may need to put down collateral such as a post-dated check.
Just like regular loans, there is an interest charge but usually, this charge is very high compared to traditional lending methods. Both are high, but this one wins for the highest amount, hands down. Sometimes, the amount you pay back can be 400 percent higher after all of the interest is calculated. There also may be an additional application fee. The regulation setting process is still in progress. Some states already have them in place and limit the percentage that can be charged.
If you need to borrow more than $1000 or looking for longer payment terms, you should consider applying for unsecured personal loans instead.
Why are Payday Loans Beneficial?
There are many reasons why payday loans are popular. Applying for this type of funding is easy and most people qualify as long as they have a job. You must have a steady income and have good standing with past loans of this type. The application is quick to complete and you can have funding fast after the application is completed and approved. You’ll receive your money quickly also.
Another reason why payday loans are common is that because the amounts are smaller, they’re easier to pay back when you get your paycheck. The life of the loan is very short lived. The amount you can get will depend on how much your income is. This means that with a higher income, you’re pay back abilities are much stronger.
There are no restrictions when it comes to what you can use the money for. It can be used for any purpose such as home repairs, medical bills or any type of bill, even for shopping.
Another benefit is that businesses you get payday loans from have longer hours than the banks do. This means that you can still speak to someone even if it’s after 5 pm, unlike a bank that has people available only up to around 3 pm.
No Credit Check Payday Loans
Not everyone has perfect credit and if you fall into this category, you can still get a payday cash advance loan. It is possible to find a loan store to get a loan without have your credit check. This means that as long as you have a steady, reliable income, you can get funding you need based on this alone. It will not affect your credit rating like it does sometimes with credit checks.
Payday Loans without Employment
If you’ve just started a job and didn’t get your first paycheck yet, you can qualify to get a payday cash advance loan. Sometimes it takes a while to get your first income check or direct deposit after starting work at a new employer. Even without income you can get the money you need as a temporary solution depending on the lender. If the loan provider is sure you will pay it back, then the money can be deposited into your bank account or you can get a check as soon as the same day or next day.
With most payday loans, or more precisely, the traditional type, you’re employment is verified and your credit is checked. This takes longer than this type of loan. All of the information you give is also verified and this can take up to a week, stopping you from getting the money you need now. With technology advancing, this process has been phased out by some payday loan providers.
Basic Requirements for the Loan
- Individuals under the age of 18 are not permitted to apply for this type of funding. You are legally responsible for any financial transaction upon reaching this age.
- Some type of guarantee of payback must be provided.
- There are some loan providers that request post-dated checks when you are approved for this type of loan.
- There are many different types of payday loans to choose from but make sure you read the fine lines before you sign on the dotted line.