Payday loans, which is also known as cash advances, are a way of borrowing money to cover short term cash emergencies. They allow you to borrow a sum of money, usually up to $500 or $1000, until your next payday. A payday loan is often used to cover short term cash emergencies, such as paying for repairs, medical expenses, or just to pay the bills.
Benefits of Payday Loans
Payday loans can be a quick and easy way to get the money you need when you need it. If you apply online, the money will usually be deposited into your checking account on the same or next day. The loan amount will then be deducted from your checking account, together with the loan fee, on or after your next pay-day. This means that the whole process can be done from home, making it a very straightforward and convenient way to borrow money.
Almost all high street financial institutions, such as banks and credit unions, do not offer such immediate and short term loans. This makes the availability of these kinds of loans much more limited. As such, a payday loan may well be your best option for such a short term loan.
Few things to consider before deciding to apply for a payday loan
Although you receive the money for a payday loan very quickly, you also have to repay the loan after a relatively short period of time. Payday loans are generally repaid with just one repayment, rather than being split into a number of monthly payments. You should make sure that you will be able to pay the sum back on your next pay-day without getting yourself into further difficulty next month.
Loan fees for payday loans, in general, appear to be reasonably low. However, if you consider the relatively small amount of money that is borrowed, together with the time frame for the loan, it can actually translate to being a very high interest rate. If you don’t need the money quite so urgently, you may be better going for a more conventional personal loan, which will have a lower interest rate and can be repaid over time.
Payday Loans with Bad Credit
If you need a payday loan but have bad credit, you shouldn’t worry. Most payday loan companies do not run a credit report when you apply for a loan. Instead, they usually ask that you have been employed for six months and have a minimum monthly salary (usually around $1000).
Applying for a Payday Loans Online
Nowadays, it has become possible to apply for payday loans online. This makes the application much more convenient and easy as you can complete the whole process from the comfort of your home.
The Application and Payday Loan Process
The initial part of the application process will simply be filling out an online application form. If you are inputting confidential information you may want to make sure that the page you are entering it on is secure. If you are using Internet Explorer, look for the padlock symbol in the bottom right of your window.
Some payday loan companies may require you to provide fax copies of some documentation. This may include copies of recent bank statements or a copy of your last paycheck. If you don’t have access to a fax machine, you can apply through a company that doesn’t require and faxing, e.g. Loan-Till-Payday.com.
The company will review your loan application. This is usually done very quickly to ensure that you can receive the loan as soon as possible. Once your loan application is approved, you will receive the funds directly into your bank account on the same or next day.
Repaying your Payday Loan
Payday loans are usually for the length of time until your next pay-day. However, you may also be able to borrow for a longer period of time. The length of the loan will be agreed upon, during the application procedure.
When it comes to the end of the loan period (usually your next pay-day) the amount of the loan, together with the loan fee, will usually be deducted from your bank account. This makes the repayment process easy – no writing checks or remembering to make a payment.
Payday Loan Fees
Loan fees for payday loans usually range from around $20 upwards depending on the amount you will be borrowing and the length of the loan. Many firms will offer a flat fee for each loan amount, regardless of how long you borrow for (usually up to 18 days).
Payday Loan Offers
Many online payday loan firms will offer special incentives, which can reduce your fees substantially. For example, many companies, such as cashadvance offer fee-free payday loans for first-time customers.