Payday loans are a great way to obtain quick cash for unforeseen circumstances. Whether there is an emergency and a car breaks down or the funds are low, cash advances help many people get through rough times. These loans are intended to be short in term and repaid at the next pay period. The money is usually withdrawn from a checking account and a small fee is added for the service. While these are not meant to be a long term solution for financial problems, the occasional payday loan is helpful.
How to Obtain a Payday Loan
Payday loans cater to those who have bad credit. Even those with good credit might use these loans as a short term solution for a cash crunch. Typically, this type of loan is used by those who have bad credit and cannot obtain a bank loan or use of a credit card. Most lenders require no credit check and it is possible to have cash in minutes. Payday lenders usually look at the ability to repay the loan over past credit history. They want to ensure that a person has a means to cover the loan and a valid checking account. To get a payday loan one must have the following things:
• Verifiable Income
• Checking Account In Good Standing
• Verifiable Residence
• Working Phone Number
Some lenders will require things like a copy of a lease to verify residence and or a utility bill. The majority of lenders just want someone to have a couple pay-stubs and a checking account statement. The term ‘cash in a flash’ was dubbed for payday loans because it is possible to have money within a few minutes.
The Advantages of a Payday Loan
While they are an expensive method of credit, there are many reasons why payday loans are helpful. In fact, since these loans do not go on the credit report, there is no reason for the credit to have a hard hit or be involved at all. Most people who utilize this type of loans are those who have a cash emergency. For example, if the car breaks down or there is a threat for utility disconnection, it is a good time to use a payday loan. Here are some other reasons why people use payday loans:
• Easy to Obtain
• Less Hassle Than Traditional Lending
• Easy Repayment Terms
• Not Based On Credit
• Finance Charges Are Not Too Bad For Short Term Loan
• Doesn’t Count On Credit Inquiries or On Report Itself
• Amount Based On Payroll Amount And Ability To Repay
Payday Loans 101
The standard fee for a payday loan is around $15 per every hundred. Depending on one’s location, there may be miscellaneous fees and other charges added. Payday loans are a good alternative for those with good credit too. Not everyone wants an inquiry on their credit or to involve their credit for a short term cash problem. Payday loans offer people a chance to get the cash they need when they need it. Thankfully, payday loan lenders look at the ability to repay the loan and not the credit history.
Author’s Bio: Sharon Brown is known for writing informative articles on finance and related issues. To get answers to further queries visit the website PayDayLoans.org