A Payday Loan is a small short term loan you can use to cover spending until your next payday. You can apply online and the choice to advance you the money is made almost straight away. In most cases the whole application can be completed online and the currency loaned can be credited into your bank account on the same day as you make your submission.
Generally when you make your first application you can borrow any amount up to $1000, depending on your take home pay. You are more likely to be approved the less you want to use, so it is advisable to have a loan of only what you need. Once you have successfully repaid loans with one particular company they may then offer to lend you anything up to about $1000 in subsequent loans.
Payday loans can give a helpful solution for short term cash flow trouble.
Who Can Apply For A Payday Loan?
In order to be eligible for a payday loan you must be over 18 years old and in employment with a take home wage of at least $1200 per month. You must also have a bank account with a valid debit card.
Even if you have bad credit history you should still be able to get hold of a payday loan as long as you accomplish the above criteria.
How Do You Get A Payday Loan?
The majority of Payday Loans are available online, so there is no hold-up with faxing or posting of documents. The application procedure is rapid and easy to complete. You will be asked for your name, address, details about your monthly income and employment, when your next payday is, along with the amount you wish to borrow and your bank account details.
Once you have submitted your application you should hear back from the payday loan provider within minutes. They will email you with their conclusion to the email address you have registered with your submission.
Payday Loan providers partly make their decision as whether to lend you money dependent on the amount you want to borrow compared to the amount you earn. Only borrow what you require, the less you borrow the more likely that your application will be conventional and the smaller the amount of interest you will accrue.
If your submission is victorious you will be sent, by email, your loan agreement showing the amount that will be lent to you, the repayment date and the amount of interest you will pay on the repayment date. Along with the loan agreement you should also be sent loan circumstances. These loan conditions should outline your rights under the Consumer Credit along with details about repaying the loan, cancelling the loan and the use the personal in order you supply when applying for the payday loan.
If you are happy to carry on you sign online by providing details of your name and answering a security question such as your mothers' maiden name. Then, email this back to the advance provider and the currency will be deposited into the bank account you registered at the application process. The money can be deposited in your bank account on the same day you make the application, so this is a very fast and well-organized way of borrowing money short term.
How Do I Repay The Loan?
You will require paying back the loan quantity and the interest accrued on the repayment date as specified in the loan agreement. The refund date is usually your payday, hence the name payday loan.
The repayment will be composed by the loan provider by debiting the bank account you registered at the application procedure, which is the bank account into which you get your wages paid.
Repayment Over A Longer Period
Payday Loans may be extended if you find yourself in a location to be not capable to satisfy all or part of the amount due on the repayment date. If this happens it is recommended that you get in touch with your payday loan supplier as soon as probable and explain your situation to them. They will then be talented to explain your options and how to go about extending your loan.
Even if you are not able to completely settle the repayment amount, it is advisable to pay off as much as probable on the repayment date. This will assist to keep the quantity of interest you owe to a minimum. Some companies may charge you additional fees for extending your loan, you should check if this is the case before you sign your loan agreement.
Regulation Of Payday Loan Companies
Properly regulated Payday Loan companies must adhere to strict laws governing the money industry.
As with any monetary product you apply for it is always sensible to check that the company offering the loan is correctly regulated. The payday loan company you are applying to should show its Consumer Credit Licence number within its advance conditions and it should also be authorised by the Office of Fair Trading. If you are in any doubt as to whether the payday loan company you are considering applying to is fully regulated then you are within your rights to contact either of these bodies for further information.
As long as the payday loan company you are applying to is correctly regulated, there will be a recognised body to make any complaints you may have to and you can be assured that you will not be subject to any unfair practices.
What Are The Benefits Of A Payday Loan?
Fast
One of the main benefits of a payday loan is the speed at which the cash can be credited to you. The cash you require can be obtainable to you in your bank account on the same day that you make the use. This can provide valuable assistance if you have a short term cash flow problem and need money in an emergency.
Simple
The application procedure is very simple, it takes just minutes to apply for a payday loan and you do not have waste time posting or faxing documents to the payday loan provider, as you would with other more usual high street loans.
Poor Credit History
Payday loans are accessible to people with a poor credit record. This is because payday loan companies do not solely make their choice to lend based on a person’s credit history. As long as you fulfil the submission criteria you have a good chance of obtaining a payday loan. For numerous people a payday loan may be the only way they are able to obtain credit, especially in the present monetary climate where the mainstream of lenders are unwilling to provide loans altogether, never mind to a person with a deprived credit history.
Use Of The Loan Money
You do not have to tell the payday loan supplier what you require the payday loan for. You can use the currency for whatever you want. You may require money in an emergency which cannot wait until payday for instance; emergency medical or dental treatment, to settle a bill quickly, extra spending currency on holiday or even for a passionate weekend away. The choice is yours as long as you make the refund due on the repayment date.
No Upfront Costs
There are no upfront costs connected with a payday loan. You do not pay anything back until the repayment date you have agreed to in the loan agreement.
Why Does The APR Appear High On Payday Loans?
The APR applied to payday loans appears at first glance to be high. This is very misleading, but there is a simple reason why this figure looks so high. APR is an Annual Percentage Rate, and as such is intended over a whole year (365 days). However, a payday loan is taken usually only over a number of days or weeks.
The APR calculation was not designed to apply to very short term loans such as payday loans. It was designed to apply to long term loans in existence for a year or more. It is actually a theoretical figure than enable people to compare similar longer term loan products, like mortgages or ongoing credit balances.
Rather than relying on the APR rate it is more advisable to look straight at the loan accord to see exactly how much interest you will be charged for the period of your payday loan. Some companies have a standard interest charge for the quantity you wish to borrow regardless of the period of the loan. It is then up to you to decide whether you will be capable to pay back both the cash advance you receive firstly and the interest quantity on the refund date.
