We'll start with the most common
question of all when it comes to payday advances.
1. What is a payday advance?
A payday advance is simply that. A
loan you receive and pay back by your next payday. There obviously is more to
it than that so let's move on.
2. Why is this different than a bank
loan?
Bank loans require a good deal of
paperwork, questions into your personal finances and then days for approval.
Payday loans have little, or no paperwork upon application.
There are online lenders that tout
they are faxless loans. There are not questions regarding how much you make per
month, what your expenses are or any other personal information that you may or
may not be inclined to disclose. Your approval is usually done in minutes.
This is possible because payday
loans have different lending laws than do banks. And payday lending
institutions have limits on how much they can lend you. For instance, most
loans don't go higher than a couple thousand dollars.
3. What are the interest rates for
payday loans?
Interest rates are fairly comparable
to banks. They may be a bit higher because of the convenience you are buying
into just to get the loan. Although, I need to point out that the interest
rates when compared to banks APR's, the numbers may be staggering. And a lot of
time, that is where peoples attention stops and they forget to learn why.
As was mentioned earlier, payday
fast cash loans are SHORT TERM loans. They were not designed to be long term
and any lender that encourages you to get one long term, may be scamming you.
If not, then look at their interest rates to be sure you are getting a better
deal that won't cost you more money than your loan in the future.
Short term interest rates are
carried into any time that you default. Meaning, the longer you take to pay
back the loan, the longer you are paying those high short term interest rates
and then it is not very long before your original loan is much larger than when
you received it.
4. What is the application process?
What do I need to attain a payday loan?
The application process is so simple
you may just laugh. Obviously they need your personal and contact information.
They will require so many paycheck stubs to prove you have consistent work to
pay the loan back on your next payday. And then finally, a post-dated check
from you to be cashed on the day you have been paid and pay the loan back in
full.
If you want a direct deposit, which
has become so popular these days, you will need proof of a bank account. That
is it. You can work it out with your specific lender how you pay it back. You
can set up that time for your next payday. There are people who write their
post-dated check for half the amount and then another for the date of their
next check. Those details can be worked out with your lender.
5. What if I have bad credit?
Even if you were just turned down
for a loan at a bank, you could still walk into a payday lending office and be
approved for a loan. If you have all the requirements we just talked about; pay
stubs, address, SSN, etc, then you are in the clear.
Granted, there may be other reasons
or stipulations that a particular lender requires that may disqualify you, but
that is not the usual case at all. These loans are for people who need money
fast, and for people who cannot get money from banks because of their credit.
The approval rate for payday loans is quite high.
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