Can a payday loan help you with anything substancial? Here’s what you need to know about taking out a payday loan. Explore your options.
Around 34% of Americans have taken out a personal loan in the past year. Are you looking to take out a payday loan but you’re not sure if it can help you?
In this article, you’ll learn all about what payday loans are and how they can help you get your finances back on track. Read on to discover more about the payday loan help resources that are available to you.
1. What Is a Payday Loan?
A payday loan is a short-term high-cost loan normally for $500 or less. It helps with immediate cash needs until your next paycheck. They require only a bank account and proof of income, plus they’re great for those who have bad or no credit. You can get them online or through a personal lender.
Once you’re approved you’ll receive cash, a check, or money placed into your account.
If you’d like to know about payday loans and find out more information about getting approved today, keep reading.
2. How Do I Repay a Payday Loan?
In general, you’re normally required to repay the loan by your next payday. Since lenders can vary, make sure you’re aware of the total due and due date before signing up.
Here are a few options for paying off the loan:
- A different form of credit
- Direct debit from your bank account
- Your paycheck
- Postdated check when applying
- Through the lender’s website
Debt consolidation loans can help you pay off your payday loans as well. Although they have stricter requirements, their interest rates tend to be lower. If you don’t pay your payday loan back on time, the lender could automatically withdraw money from your account.
3. What Can a Payday Loan Help With?
When you’re approved, you can use your payday loan for anything you choose. Are you looking to purchase a new or used vehicle? Payday loans are great for this. Gone are the days when you feel you can’t get that car because of bad or no credit.
Are you barely staying afloat because of credit card debt? These loans can help you finally pay off that debt. Are you wanting to go on vacation with your family but have been holding off because of lack of funds? These loans can help you finally pay for that dream vacation.
Are you dreaming of marble countertops in your kitchen or maybe upgraded appliances? They’re great for remodeling and upgrading your home. Payday loans can help with anything else you can think of.
Sometimes in life, unexpected medical expenses happen, and maybe you don’t have the money to cover them. Payday loans can get you the money you need should any unexpected costs arise.
4. When is a Payday Loan Best?
When you’re looking for money fast and you need between $100 and $1,000, payday loans are ideal. Just be prepared to repay the loan within 2-4 weeks, depending on your pay schedule. If you’re looking for money quick, even within a day, payday loans are great.
If you can’t afford to have multiple credit checks and wait for a personal loan approval, payday loans are a great alternative.
5. Do Payday Loans Affect Credit Scores?
Often payday lenders don’t run a credit check, so applying for these loans doesn’t affect your credit. They also won’t show up on your credit report even after you’ve been accepted for the loan.
They would only show up on your credit report if you let the loan become delinquent. Always make sure to pay a payday loan off, as with other loans, in a timely manner.
6. Find Out the Payday Loan Laws in Your State
Unfortunately, not every state allows payday loans. You can check and see if your state allows them. Always make sure the lender you’re receiving the loan from is licensed.
7. How Much Can Be Borrowed with a Payday Loan?
It varies by state how much borrowers can take out for a payday loan. Some states limit payday loans to a certain percentage of a borrower’s income. Check out local consumer finance information for limits and maximum amounts allowed for payday loans.
8. Requirements for a Payday Loan
To be approved for a payday loan, you’ll need an active bank account, proof of income, and valid ID. You must be at least 18 years old. Even if you have a bank account and income, you could be rejected if you don’t have enough money.
You could also be rejected based on the requirements for each state. If you have an outstanding loan, you could also be rejected.
Other reasons for possible rejection:
- Bounced checks
- Recent bankruptcy
- Not long enough employment
- Your bank account was opened recently
- You’re active-duty military
If you’re active-duty military, you could be rejected because federal law prevents short-term loans at more than 36% APR. Some lenders will still let active-duty members borrow, but many will avoid doing so.
If you’re an active-duty military member, speak with a lender to learn about your options. Don’t let this law stop you from finding out what options are available to you.
After reading this article and learning about what payday loan help resources there are, and how you can get approved today, you can see why they’re so popular.
Gone are the days where you’ll be wondering how you’ll make it to your next paycheck because of unexpected expenses.
Would you like to learn more about everything from personal loans to to raising funding for invention ideas? Check out our other articles.