A payday loan can be described as a short-term, high interest loan that helps in bridging the gap between two paydays. It is often that tackling expenses between two paydays become difficult. This is exactly where these loans can be of great help. There is no doubt that the quick cash infusion is nice, however it is essential you have detailed information regarding these loans before applying for them.
Payday Loans – What are they?
There are several terms for this kind of credit – deferred deposits, payday loans, check advance loans, post-dated check loans and cash advance loans. You can get access to this kind of money from many sources. Even though there are stores of payday lenders, most people prefer applying for loans online. All you have to do is visit the website of the lender, fill the online form with personal and financial information and request for a loan amount.
Applying process for this loan has been kept simple, fast and hassle-free. Lenders know that applicants are working professionals, and thus have limited time to apply for the loan. While browsing through the website of the lender, you will come across an online form that you have to fill and submit right there. This entire process will not last more than a few minutes. After receiving the application, they will start working on it so that you can get access to quick cash.
Several factors play a vital role in determining how much amount you can borrow along with your credit record. Not many know that lenders pay attention to the cibil score of an applicant. Factors such as your current salary, ability to make repayment, among others, play an important role in determining the amount you can get access to. The sanction of loan application depends entirely on the lender. However, one thing that makes this loan highly popular is easy and timely availability. You can apply for this loan when all other doors of monetary help have been closed right on your face.
How do payday loans work?
Say your car broke down and you have no option but to borrow $ 300 for the repairs from a lender. You will write a PDC that is post-dated check for $340 (the principal amount plus $ 40 finance fee) to the lender. You enter these details online when applying for a loan on the internet. The lender will then approve $300 for a set time, usually two weeks. When that period comes to an end, you pay the lender $340 in cash. It is important to know that if you do not pay the debt in full at the end of the loan term then you have to pay additional charges as fees.
Who can apply for this loan?
There is an eligibility criterion that you have to meet if you want to apply for a payday loan. Only those who are more than 18 years of age, have regular and stable income that is deposited in the bank account are entitled to apply for this loan. Lenders check the eligibility criteria and other details before sanctioning the loan amount so make sure you share only correct and genuine details.
What are the advantages?
Payday loans are a good tool for easily and quickly borrowing cash during unexpected financial problems. If you do not have any other financial option then these are the loans you can count on. For instance, you can make use of a payday loan for taking care of temporary and immediate financial needs such as a car repair or other one-time expense. These loans are a blessing for people who do not have savings. Given that these loans can be acquired easily without facing any daunting formality, they are just an ideal financial solution for many people.