Emergency needs require quick financial intervention. If you do not have enough savings in your emergency fund kit, you may feel stuck. Fortunately, you can now access payday loans to settle the urgent need.
What are payday loans?
Payday loans often referred to as cash advances, are simply high interest, low-balance, and unsecured loans. In most cases, the loan is offered for a short period. In addition, the loan amount is usually small. This type of loan is ideal for anyone who needs quick financial help and is willing to use their next paycheck to settle the debt.
Do payday loans have another name?
Yes, here are the other names that refer to payday loans
- Payday loans are also called:
- Paycheck advance
- Bad credit loan
- Payday advance loan
- Cash advance
- Deferred deposit transaction
- Short-term loan
Payday Loan Amounts
Generally, cash advance amounts range from $50 to a maximum of $1000. However, the amount of payday loan to qualify may vary depending on your income and the lender.
Some states have guidelines stipulating the maximum amount of cash advances you can borrow. In addition, some regions put restrictions on the number of payday loans that you can have at a time. Thus, most borrowers will not borrow more loans that they can pay back.
Remember, these loans attract high-interest rates. Thus, you should only borrow an amount you can easily manage to repay without hurting your financial standing.
Reasons why you need a payday loan
Payday loans have these features:
1. Ease to Access
Ease of access to payday loans is the first advantage. Typically, many short-term loan lenders process the cash within 24 hours from the time of application. In addition, they offer instant lending decisions.
Such loans are accessible any time of the day or any day of the week. Fortunately, most payday lenders have online application portals. Thus, borrowers do not have to visit their offices. In addition, there is no paperwork involved. Within five minutes, you can fill out your online loan application form and receive an immediate decision on the status of your request.
2. Fewer requirements
Unlike their traditional counterparts, cash advances ask for fewer requirements. Indeed, you will only need:
- An active bank account.
- Proof of address.
- Be 18+ years of age.
- Government-issued documents of identification such as ID, passport, etc.
- Have a source of income or a regular job.
- Must have proof that you have worked for the last three months and received your payment.
With these requirements, however, few they seem, you can get instant cash advances from the best lenders in your city.
3. No credit check
Traditional loan lenders must review your credit history and ratings to assess your eligibility for a loan. But payday loan lending companies operate differently. Usually, they never ask for credit reports.
The only problem is that these loans will not help in building a positive credit rating. Thus, you may have to have a good borrowing relationship with banks and other financial institutions.
4. Unsecured loans
Payday loans are different from auto loans, car title loans, and mortgages. They vary because they do not need any security such as your property, house, etc. thus, the cash advance cannot seize your property upon defaulting on the loan.
However, the lenders have access to your bank account. Besides, the lender can partner with debt collectors or sue you over the unpaid loan.
What to do before taking cash advances?
Before you apply for the payday loan, you should do the following:
- Make sure the payday company is fully licensed.
- Find out the total cost of borrowing the loan.
- Be confident that you are capable of repaying the loan within the stipulated period.
- Understand the fines and any other consequence of not repaying the payday loan in time.
Consider a cash advance when you have an urgent financial need. Such loans are easily accessible, have quick approval, and do not need credit ratings. Besides, you will only need proof of address, evidence that you are working or run a business, valid identification, and proof of permanent residence. However, ensure you pay back your loan within the agreed period to avert fines and other possible consequences.