When you need a quick infusion of cash to pay an unexpected bill, obtaining a payday loan is a convenient solution for dealing with the debt. You can receive funds within 24 hours and have money deposited directly into your bank account. Before you apply for a payday cash loan, you should familiarize yourself with the basics of these transactions:
Unlike applying for a traditional bank loan, the process for a obtaining a payday loan is quick with straightforward eligibility requirements. You will not have to undergo a credit check, eliminating worries about whether your credit score will affect your loan application.
In some cases, you will not even have to visit the payday loan office. You can apply online and complete the transaction virtually.
You should be an adult that meets the following requirements:
- Have a verifiable source of regular income
- Have a checking or savings account
- Not be a current debtor in a bankruptcy case
- Be a resident of the state where you apply for the loan
- Have a valid Social Security number
Some lenders will require that your bank account be open for a minimum period before approving a payday loan.
If you are a member of the military, lenders cannot offer you a payday loan per federal law.
Loan Amount and Interest Rate Restrictions
Payday loan restrictions vary by state. Some states limit how much you can borrow and how much interest the lender charge. For example in California you can only borrow up to $300 while in Oregon you can borrow up to $50,000.
A few states do not have any restrictions at all on how much you can borrow. States with no maximum lending requirements include Maine, Utah, Wisconsin and Wyoming.
When you apply for a loan, you will pay the lender a fee. States also set fee limits. For instance, in some places lenders cannot charge you more than $15 for each $100 you borrow.
In addition to these restrictions, you may be prohibited from taking out more than one payday loan at a time.
Paying Loans Back
Your loan agreement will include details on the repayment deadline and penalties for late payments. Generally payday loans cover a two-week period and are due on the date of your next paycheck.
When you apply for the loan, you will most likely give the lender access to your bank account so they can automatically withdraw the money on the due date. You can also provide the lender with a check that they can cash on the due date.
Depending on your state's laws, you may be able to take out a payday loan for a longer period and pay the debt back in installments.
If for some reason you are unable to pay back the loan by the agreed due date, you can ask the lender for an extension. Some lenders will work with you to grant you more time provided that you pay a certain amount on the original due date. This amount may be the interest due or a sum determined by state laws.
As soon as you take out a payday loan, eliminate extraneous expenses and put yourself on a strict daily budget to help you save to repay your debt.
While applying for payday loan can be a quick, paperless transaction, you should educate yourself first on the small print in loan agreements before blindly filling out an application. Lenders are bound by law to treat customers fairly.
However, you want to make sure that you will not be getting in over your head financially, and that you have the means to pay the money back per the terms of your loan. Never borrow more than what you can realistically afford to repay. To learn more, contact a company like EZ Money with any questions or concerns you have.