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A Guide Before Applying for a Payday Loan

What's a Pay-Day Loan?

Just like quick loans, the payday loan is a small-dollar loan you can get until your next payday. It's a small-dollar loan due to restrictions on the amount. The majority fall within the range of $100 to about $1500. You're typically getting this loan to pay back once you've gotten your paycheck.

You can also call it a short term loan, a paycheck advance, a payday advance loan, a bad credit loan, and its many aliases. The bottom line is that it's a quick loan you use to meet your financial needs until your employer pays you.

Payday loans come in handy for salary earners who have pressing needs to meet. So a certain amount which is permitted by the lender is borrowed. When it's payday, you pay back the amount and interest agreed.

The method of application involves similar steps with most loan processes. Repaying the loan could be via check or electronic debit. It's entirely accessible to people with bad credit and zero credit. Hence, it's a significant alternative in times of emergency and the urgent need for cash.

Benefits of a Payday Loan

Ease of Access

Payday loans have their benefits. One of them is the ease of access. Most payday lenders offer 24-hour lending access and almost instant response on loan application. Majorly, lenders disburse cash within 24 hours.

Traditional loans are famous for their rigorous application processes. Payday loans, on the other hand, can take just 5 minutes.

Simple Process, Fewer Requirements

Traditional loans usually demand a long list of requirements and documentation. Your proof of income, Social Security numbers, photo ID, and credit history are primary credentials for a loan application. But for the payday loan, requirements are simplified to a few depending on the lender.

Once you're 18 with a government-issued means of identity or Social Security number, you're eligible. Also, you'd need a job or any stable source of income and an active personal bank account for a successful application.

Your Credit Score Doesn't Matter

Good credit is essential to approval if you've considered a traditional loan. The case is different with payday loans. You don't need an impressive credit history to get the "instant" loans. There would be no credit inquiry. Hence, your credit score wouldn't be affected, as well.

Although, in some cases, the payday loan won't impact your credit or increase your chances of accessing more significant financial services.

Crucial Factors to Consider Before You Apply

Before applying for a pay-day loan, there are many considerations you'll need to put into perspective. From the amount you seek to the lender's terms, payday loans can become a financial burden. 

It is wise to apply for a small amount because you would be able to repay with no hassle and still meet other financial obligations. And the fact that payday loans don't build credit ratings is another concern.

First, it's not a secured loan. This loan is different from auto loans and mortgages. The payday loan is unsecured by personal possession or property. Therefore, you may lose your property to collectors should you default.

Besides being unsecured, payday lender terms are other factors to look out for before applying. You may have granted them undeniable access to your bank account to make withdrawals. They can sue you over debts or send your debts to collectors.

Only due diligence and the right information can guide you from predatory lending services. Choose only fair interest rates.

How the Application Works

So all you need to do is open a bank account, Have a stable source of income, and valid means of identification. Payday lenders aren't big on credit check inquiry. You specify your amount in your application form. Items like your salary determine your repayment period and schedule. After verification and confirmation, you await disbursement. The lender then pays the requested amount to your account.

You'd need to follow your repayment schedule to repay the amount requested.

On payday, you'd have to remit a specific amount in partial fulfillment of your terms with the lender. This pattern would continue until your the completion of repayment.

Where to Get Pay-Day Loans

You can access payday loans in loan stores and online. Most banks offer it as an add-on service for account holders to consider. You may also want to request from the bank that holds your salary account.

Today, it's faster to access payday lenders online. Most of the best payday lenders offer flexible amounts and friendly terms. You can also see repayment estimates with interest rates included should you decide to apply. Many have also increased their accessibility with apps.

Once you register, you can always download the app and get cash on the go. Apps are becoming the convenient options for instant payment nowadays. 

Needs can be very pressing. But, remember, not all lenders care about their borrowers. With our guide, you can apply and access faster and instant payday loan services. Consider choosing from our Best Apps for Payday Loans to get started.

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