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The
Payday Loan Process
A
payday loan is meant for an unsecured, short-term cash
advance until next payday. Customers choose payday loans to
cover small, unexpected expenses like medical emergencies etc
while avoiding costly bounced-check fees and late payment
penalties. Payday Loans way to fast cash based on the nature
of your employment and the salary you draw. Pay Day loans are
easy, fast cash loans available at a larger fee. These loans
are approved much faster and require fewer papers.
Payday
loans are also called Cash Advance Loans or Check Advance Loan
or Deferred Advance Loan.
Payday
loans are:
·
Short term loans
· Require
much less paperwork
·
Are disbursed usually
within 24 hours
·
Are more expensive than
other loans
·
Useful for people with
bad credit history
Generally,
these loans are used by people in emergency on basis of their
employment records and are good for people who do not have
credit cards also.
Payday Loan
Process:
To
get a pay day loan you need to submit an application with your
employment records and sometimes a check made out to sum (loan
amount added to fee for the time you take the loan).
The
lender will hold the check till your next payday and will cash
it then if you are not planning to rollover.
Better
Business Bureau publication is good place to locate a reliable
lender in your locality.
The
fee charged will be either a percentage of the loan amount or
affixed amounts like say $20 for all loans from $50 to $500.
In
case you roll over the loan, the fee will be added for every
period say for every 15 days full fee will be added up.
The
truth in Lending Act makes it mandatory that the APR, Finance
Charge should be communicated to the borrower in writing. So
make sure you get this information from the lender.
When
you apply for the loan, keep your employment and salary
details along with bank information at hand. Also if you have
been employed with the same employer for more then six months,
you will get the loan at lower fee so make sure to point this
out to lender while borrowing.
Once
you have the loan make sure that you budget the pay such that
there is no need to roll over as the APR will be around 390%
in almost all cases. The figure seems to be absurdly high and
so do this simple check:
Multiply
the loan fee with the number of pay periods. If your loan was
for 2 weeks, there will be 26 such periods.
Now,
this number should be multiplied by loan amount and then
divided by 100 to get the APR figure in %.
Once
you have the pay in hand its usually good idea to return this
loan.
Benefits of availing such a loan:
- No hassle of a credit check.
- Apply in person, on the phone or on the Internet.
- The process takes less than 20 minutes to at most 1 day.
- The loan is automatically deposited into your bank account within 24
hours.
- No up-front costs.
- It’s discreet and secure.
Payday
loans are good option if you are in Military and are waiting
for the paycheck as you are on the leave.
In
case of emergencies like medical emergency, urgent car repairs
etc. also, this is good option.
Payday
loans do not hurt unless rolled over for really long time. If
you roll over, these loans increase in costs.
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