More and more people nowadays are finding themselves stuck in the middle of a challenging financial situation. That being said, you’re not the only one who’s experiencing cash flow problems. One of the best options for you to solve this issue is to apply for easy payday loans online. These can reduce your stress to a significant extent by taking care of necessary expenses.
Payday loans are short-term and are basically guaranteed for a certain amount of time (about two weeks). They’re quite a popular type of loan around the world. Payday loans Edmonton in Canada, for example, rank at the top when it comes to fast, real-time financial solutions for taking care of the veterinary bill and emergency car repair expenses, among other things. Payday loans exist in various different names, including payday advance loan, short-term loan, cash advance, bad credit loan, deferred deposit transaction, paycheck advance, and emergency loan.
Read on to learn more about payday loans and the benefits of availing one online.
Which Kind Of Loan Does Payday Loans Fall Under?
It’s important to know the different kinds of loans and where payday loans fall under, not only to understand its nature, but also to identify if it’s really something that will suit your needs. The most common loans are the following:
- Unsecured Loans
This kind of loan doesn’t require any collateral. Home improvement, education, and wedding are common reasons why people avail of unsecured loans. Loans under this category include credit card cash advances, personal loans, and, of course, payday loans Calgary and from other parts of the world.
- Secured Loans
Unlike unsecured loans, this kind of loan requires borrowers to pledge collateral. What’s collateral? It’s the guarantee that lenders hold in case you fail to pay off the borrowed amount. People commonly avail of secured loans when purchasing a house or car. Secured personal loans, pawn shop loans, home equity loans, and title loans are examples of loans that fall under secured loans.
Before tackling the benefits of availing easy payday loans online, take a look at the frequently asked questions about payday loans and their corresponding answers below.
What Really Is A Payday Loan?
When borrowers avail of payday loans, they typically write a personal check indicating the amount of money borrowed, including the finance charge, and, then, receive cash. Payday loans, as already mentioned, are short-term cash loans. They’re based on electronic access to the bank account of the borrower or the borrower’s personal check that’s held for a future deposit. That being said, borrowers may also receive and repay payday loans by signing over electronic access to their accounts.
Payday lenders can either request authorization that allows them to electronically withdraw multiple payments from the bank account of the borrower. Such a setup usually takes place when a longer term payday installment loan is offered. The withdrawal typically is due on each pay date. They can also hold the check from the borrower until the next payday. Borrowers can, then, redeem their checks by paying the loans and the finance charge in one lump sum with cash. They can also opt to allow the check to get deposited at the bank. Another option that borrowers can take is to roll over the loan for another pay period by only paying the finance charge. You can learn more about rollover payday loans later on.
What Are The Requirements For Getting A Payday Loan?
Requirements, of course, vary depending on the specific lender with whom you’re applying for a payday loan. Typically, however, you need to have a bank account that’s in relatively good standing. You also have to submit documentation to verify your identity and provide proof of a steady income source. Payday lenders often don’t ask questions or conduct a full credit check to determine if you can afford to repay your loan. As long as you comply with the basic requirements, you’re most likely going to be approved.
How Much Can A Borrower Get With A Payday Loan?
Payday loans can range from 50 to 1000 dollars, depending, again, on your state or country’s laws. The average payday loan, however, is $350, usually on a two-week term. Out of the 32 states in the US that currently allow payday lending, only Wyoming, Wisconsin, Utah, and Maine don’t have a cap. The rest have a capped maximum loanable amount. Montana and California have the lowest cap amount at $300, while Illinois, Idaho, and Delaware have the highest at $1,000. These are according to the Consumer Financial Protection Bureau. Again, caps vary significantly if you’re from Canada, Australia, or other countries.
How To Repay A Payday Loan?
Depending on the lender, borrowers can have a few options when it comes to paying off their debt:
- Online (through the website of the lender)
- Another form of credit
- A direct bank account debit
- A check on your payday
- A postdated check that you submit when you apply
If you fail to repay your loaned amount when it’s due, the payday lender can electronically withdraw money from your bank account.
Generally, borrowers are required to pay back a payday loan by their next payday with a single payment. Make sure, however, that you check for the date in your loan agreement or ask the lender for the specific due date since repayment terms can vary.
What’s A Rollover Loan?
As already mentioned, the borrower can opt to roll over the payday loan by only paying the finance charge. What a rollover payday loan means is that you and the lender agree to renew the terms as long as the state law permits. The lender allows the existing loan to be renewed again if it’s set to be due soon, so the old balance due can be rolled over into a new loan.
Rolling over a payday loan gives you more time to fulfill the agreement and pay back the loan. It allows the borrower to pay the fees only. The due date for the main, larger loan balance, then, gets extended to a future date.
How Will Payday Loans Affect Credit Score?
As previously stated, payday lenders don’t often do credit checking. It means that payday loans won’t be showing up on your credit report. It also means that they don’t affect your credit score. Therefore, if you’re aiming to improve your credit score by taking a payday loan, this may not be the best option for you to opt for.
The only way a payday loan can appear on your credit history is when your loan becomes delinquent because of late or payment overdue. What happens is that the lender opts to sell your account to a collection agency. When a collection agency purchases and acquires a delinquent account, it will have the option to have it reported to the credit reporting bureaus as a collection account. That’s the time your credit score could be damaged.
How To Find A Reliable Payday Lender?
One of the most important things to look for a payday lender is its license to operate. You already know that not all states and countries allow payday lending. However, those that do require the lenders to obtain a license. An unlicensed lender doesn’t have any right to collect payments or require consumers to repay a payday loan. The loan will be considered void if one is made by a lender that doesn’t have a license to operate.
Whether you’re obtaining a payday loan from a storefront or online, it’s best to know and understand the laws of your state regarding payday loans. You can usually find licensing information through your state’s attorney general or bank regulator.
Aside from the license, you also want to look into the reputation of the lender. Spend some time learning about what people are saying about the lender. Specifically, check on those who already have experienced taking out a loan from the same lender. For instance, in Canada, one of the leading online payday lenders is iCASH, and this video https://www.youtube.com/watch?v=x-du8YKJw1M of one of their clients shows that they’re trustworthy.
Benefits Of Easy Online Payday Loans
There’s a huge deal of positive things that would incline someone to get a payday loan. It doesn’t only bring ease to your life, but also offers you an extremely great number of facilities.
When talking about the benefits of taking a payday loan, the first crucial matter is that when banks and other financial institutions deny providing you a loan, a payday loan company can save you. You’re not only able to avail instant loan, but you are also free to utilize it for any reason. You might be going on a much-needed vacation, or you want to purchase the latest smartphone in the market. You can do that and need not explain it to the lender. It’s unlike most other loans where you really have to explain to the issuing authority how you used the loaned amount. That’s only one of the many advantages of availing payday loans online.
Have a glance at the other benefits of online payday loans below. The following should help you decide whether or not taking one is a good idea when you need fast cash.
- Instant Cash
You can get your loaned amount within 24 hours after submitting your application. Online payday loans, indeed, are fast to obtain. There are even instances where you’ll get the money after one hour as long as the application has already been approved by the lender. Some lenders may require an extra fee to review and process the loan application within an hour, but that’s, still, worth it if you think about it.
- Fewer Requirements
Generally, for you to be approved for a payday loan online, you only need to have an active bank account, a regular source of income, and a government-issued ID. You, of course, need to be at least eighteen years old, too. The requirements are fewer, which makes payday loan companies more convenient to deal with than traditional lenders. As you probably already know, traditional lenders are more strict when it comes to verifying your ability to pay back the loan. Aside from a credit check, they usually require proof of income, photo ID, and Social Security number.
- No Seizing Of Property
A payday loan is a type of unsecured loan, which means you don’t have to associate a property, such as your car or home, when taking out one. It may offer fast cash, but only a little money that you can pay in quite a shorter duration. This prevents troubles, such as seizing of a property that you may experience in the future with traditional personal loans. Yes, your property remains safe even if you’re unable to repay your borrowed money because of poor financial condition. Seizing of property is a notorious and undesirable approach that most traditional loan providers employ. You can prevent it from happening with online payday loans in the case of default.
- No Checking Of Credit History
Online payday loan companies don’t require a credit history. In traditional lenders, however, you need a good credit score to be approved. No hard credit inquiry will happen since payday lenders don’t pull your credit. That only means one thing–your credit score won’t decrease by several points.
- Information Security
Online payday lenders may ask for some documents, such as valid identification and proof of income. It also happens in storefront or brick-and-mortar payday loan companies. The good thing about this process is that payday lenders actually ensure that all your information is kept secure and confidential at all times. You’ll get the assurance that they won’t pass anything on to other companies.
Online payday lenders offer up to a thousand dollars. How much you can borrow will be determined by your monthly income. That only makes it easier for borrowers to repay the loan when the due date comes.
With online payday loans, the borrower doesn’t have to visit the office of the lender during the whole process. The money will be transferred to your bank account through wire transfer once your application is approved and processed. Online payday loans, indeed, are very convenient to obtain.
Keeping all those benefits in mind, you can’t go wrong if you opt to apply for a payday loan online when you’re in need of urgent financial help. As long as you research the credibility and reputation of the lender and choose one who understands your needs, it will always be the right choice for some fast cash.