From time to time, we all have a call for little financial help. But how to cover money problems without having any savings or emergency funds? A recent survey held by Go Banking Rates showed that 69% of American households have less than $1000 in savings. Many families in the United States of America live on paycheck to paycheck. While emergency funds sometimes are essential as a rough situation creates a need for immediate cash. Here the necessity of payday loans arises. A payday loan or a quick cash loan is an excellent way to obtain the amount of money we need for unexpected expenses. It is a small short-term loan, the amount of which ranges from $100 to $2500.
Pluses of Payday Loans
1. No paperwork/online application
Compared with traditional loans, the process of applying for payday loans takes minutes. You fill out an online application and get a swift decision—besides, the process needs minimal documentation. Online applications save your time; they don’t make you wait in queues, and the most important thing while applying online is user-convenience: You can apply for a payday loan from any corner of the country.
2. Bad credit welcome
Traditional loans need an excellent credit history to approve your request. For payday loan lenders, credit history is not required. Even with a bad credit score, you can still get a loan. No credit inquiry is needed that can decrease your chance to obtain the money.
3. Quick approval
For those in a challenging situation lacking an urgent payment, a payday loan or a quick cash loan is the best opportunity to overcome the obstacles. After submitting an online application form and getting immediate approval, the money lands in the bank account within minutes. The lenders don’t even require any collateral like your car or a house.
Here is the procedure for taking a loan:
- Visit the payday lending website, where a massive network of third-party lenders is gathered.
- Accept the terms and conditions.
- Fill out the application form offered by the Website.
- Submit the application and wait a few hours.
- Collects the information provided by the borrowers.
- Provides the data to third-party lenders.
- Check the eligibility of the appliers.
- Make decisions. Either deny or approve the application.
- Transfer money directly into the borrower’s banking account.
What Personal Data Is Required for Getting a Payday Loan?
There are some obligatory requirements to be eligible for payday loans. Among those requirements are:
- Age: the borrower should be at least 18 years old.
- SS number: the borrower should provide a legal Social Security number.
- Government-issued ID: the borrower should provide a valid ID.
- Income source: the lender should be confident with the existence of the borrower’s income source.
- Address: the borrower should be a resident of the United States of America.
- Bank account: the loan should be transferred directly into an active bank account.
What If The Borrower Cannot Repay His Payday On Time?
There are three credit reporting agencies-Equifax, Experian, and TransUnion in the United States of America. If you cannot pay back your payday loan on time, your case may be sent to those agencies, who send notifications until they receive the amount. And if you still cannot repay your payday loan and lack the funds needed, you may face extra fees charged. To avoid such a situation, we highly recommend you contact the lender and discuss possible solutions to the problem if you have a shortage of money for repayment. Arrange a temporary payment plan with the lender as early as possible because there is no other way to overcome the situation.
A Free Bit of Advice
- Take a payday loan only in case you need to cover unexpected expenses. Taking a loan without determining its purpose can be dangerous, as paydays are short-term loans with high-interest rates that can damage your financial situation and cause more charges. In this case, payday loans can become a lot more expensive than you intended them to be.
- Calculate how much you can afford each month. When you are determined how much you can provide each month for repaying a payday loan, it is easy to get the right amount of money for the most suitable time. Or else, you will get trapped by your debts and have to prolong the repayment period, which will cause you more fees and damage to your finances.
- Realize the risks of payday loans. The most dangerous in taking payday loans is getting stuck in a cycle of debts. When you borrow money and are short of funds to repay it, you get another loan to cover your debts. This cycle can be continuous and risky.