7 Facts About Payday Loans That You Need To Know

Everyone knows how bad a cash crisis can be. Moreover, waiting for your next paycheck in such a situation can be stressful and only compounds your woes.

This may have happened with you once or more, as it happens with most people. Handling such a concern is not always easy. You may try borrowing from friends or colleagues but things may not always work this way. A payday loan emerges as the best solution to get you out of the fix when you hit a road bump with your finances.

As the name suggests, this is a kind of short-term loan which you can use to manage your expenses until you get your next paycheck. Usually, these loans are small in amount because all you need to do with them is cover small expenses. However, you must not take a payday loan frivolously because it is still a debt, however small or short-term it may be. Here are some payday loan facts that you must absolutely know before applying for one.

Fact #1: You need to write a check to procure payday loans

First things first, you need to know the process of procuring a payday loan. Usually, the loan amount extends to a few hundred dollars and you need to repay within a couple of weeks. The procedure of getting the loan is simple as all you need to do is write a post-dated check for the amount being borrowed. Typically, a finance fee is added to the loan amount. You leave the check with the lender and they will cash it on the due date.

Fact #2: You can get the loan extended if unable to repay on the due date

Even if you get the loan for only a couple of weeks, you need not worry if you are unable to repay it on the due date. You have the option of getting it extended by speaking to the lender and convincing him or her. However, they will expect to charge a higher fee because it will get accumulated for a longer time span. But some states have rules to regulate the loan rollovers by restricting the number of times the loan can be renewed. Therefore, you must know the state rules before taking a payday loan.

Fact #3: You can even get one with bad credit

Don’t worry if you have a bad credit rating because you can still get a   loan without much work. This is because the approval formalities for these loans are fewer and simpler as compared to those involved in traditional loans. Anyone who is 18 years or older and is employed with a checking account may apply. Moreover, you need not even have great credit scores to get a payday loan approved. In fact, you can get one even with no credit history. As a result, they make a great option for those encountering financial problems.

Fact #4: You can get a payday loan online

Another interesting fact about these loans is that you can even get them online besides the traditional options. In fact, the online option makes things much more convenient for borrowers as they need not run from pillar to post in search of a lender to help them. The best approach is to look for a website that offers pay day loans quickly and easily. Look for one that processes the loan applications within minutes and provides you money within 24 hours. Go through their process carefully before applying for the loan online and understand the requirements as well.

Perfect Payday loans are a simple, but often overlooked, answer to your common financial tribulations. If you discover yourself in any of the subsequent situations, you would possibly want to think about researching, and applying for, a web payday loan.

Facts #5: You should have good reasons to take a payday loan

Since the interest charged on payday loans is on the higher side, you should have a valid reason to opt for one. Typically, borrowers use it to cover a crucial bill that they need to pay in the middle of the month but do not have enough funds to pay it. Obviously, you would rather take a loan rather than have your electricity cut off or the phone service deactivated. Having a pressing healthcare bill is another reason that justifies the loan. Whatever the reason you need the loan, always make sure that you have a proper plan to pay it off.

Fact #6: You should have a payback strategy

Even though a payday loan can reduce your stress to some extent, don’t take it for granted. Remember that these are short-term loans that need to be repaid within 10 to 14 days. A payback strategy helps you to repay on time, which is the reason that you should absolutely have one. Even if you do not have the cash to pay it back, you can take another payday loan to get it paid. However, it is better to have a strategy right from the start so that you can repay easily before the due date. Proper planning of expenses with your subsequent paycheck is a smart move in this context.

Fact #7: You may have the loan denied because of some reasons

Even though a payday loan is one of the easiest to procure, you may still get a denial because of some reason. The most common one may be that you do not fulfill the eligibility criteria related to age and employment status. Also, prospective borrowers who fail to give correct information while applying for the loan may not get approval. If you want to eliminate the chances of denial, make sure that you are eligible and include the correct and complete details in your applications.

A payday loan can be a life-saver, particularly when there is no other way to arrange funds for emergency expenses and regular bills. It gets you fast cash on the fly, even without having to wait for a business day. However, you must borrow one judiciously and also make sure that you will be able to clear it off as soon as you get your next paycheck.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan