|
As many of you already know, a payday loan is a unsecured short term cash advance that can be used for immediate cash needs or emergency. Borrowing from from family and friends is an option but that could cause embarrassment. You can also go to your local bank but that takes couple of business days or even weeks before you actually see the money. If you're in a emergency and don't have a readily available source of cash, the best alternative is to apply for a payday advance. The choices available to get these no security payday loans are unlimited. These loans usually range in the amount of $100 - $500 but that limit depends on your state laws regulating payday loans. As we pointed out earlier, these loans are unsecured and you do not have to provide any collateral and as a result they are sometime referred to as no collateral payday loans. These loans usually don't put too much into your credit rating and you can usually get a pay day loan if you're at least 18 years of age, US citizen or legal resident and have a job. Most of the time, only paperwork or documentation required is your drivers License, bank account information and a recent pay slip.
With the recent internet boom, getting a payday loan has become as easy as couple of clicks of your mouse. What you need to do is to research online lenders to find the right fit and you can get your check by overnight mail. As you can see, biggest advantage of a online payday loan is that you don't need to go from one lender to another in search of a right lender. However, you should also pay some close attention if you're applying for a payday loan online. First of all you may end up with a lender where you can't really talk to a live person and everything is automated. Any errors during or after payday loan may cause you lot of headache if you can't talk to someone. Don't base your decision on some fancy testimonials that you read online and on lender's web site. Try searching online forums to find feedback on your prospective lenders. Remember, A little extra effort up front will benefit you in the long run.
How does a Payday Loan Work?
Payday loan process is fairly simple and quick one. You apply for a loan and if approved, you simply write out a personal check for the amount you are going to borrow plus the finance charge and you are issued cash instantly. Your Lender will them hold the check until your next payday or agreed upon date. Once your due date arrive, you're then responsible for paying off the total amount due, which is loan plus finance charges. If for some reason you can't pay off the loan, you simply pay off the finance charge(depending on your state laws) and loan amount is carried forward to your next paycheck.
How to Find a Good Payday Loan?
Finding the right payday loan is difficult but not impossible. You shop around just like you do for a car or a house and try to get the best deal. What you're looking for is not only lowest Annual Percentage Rate(APR) but also lowest processing fees. Remember, there is no good reason to take a loan where you save $10 on finance charge but pay $20 in processing fee. If you're applying online make sure you read their lending policy because you may not get a chance to talk to a live person and asked questions. A good payday loan company would provide you necessary information and would also require income proof and bank documentation. Once you have find a lender that you like, you should start looking in to more detail information such as their ability to offer you a loan in your home state(A lender need to have a license to operate in any state). Check to see if they allow to carry a loan forward and beyond the original term. Also, make sure web site is using SSL encryption and it is secure since you're supplying your financial information(such as Bank info and paycheck details). The most important thing that you can do is be smart and educate yourself on the different aspects that make up payday loans. You don’t want your debt to spin out of control. Borrow only the amount that you need and try to pay it back as soon as possible
Selecting a Payday Loan Lender There are thousands of payday loan lenders out there and they all want your business but you have to find the lender that is right for you. There are certain things to consider before selecting a payday loan lender.
Terms and conditions: Make sure that you fully understand the terms and conditions of your loan or you could end up paying more finance charges then you anticipated.
Interest rates: Interest rates are paid on payday loans. You will probably have to pay $20 to $40 per $100 borrowed. That is why you want to shop around and find a good deal. Also pay close attention to any fixed processing or financial fees. These fees are sometime paid up front and deducted from your loan amount itself. Make sure you don't get slapped by these predatory fees and charges.
Maturity date: Many payday loan companies consider your next pay day as the maturity date on your loan. Some payday loan companies may extend your cash advance period. You could get a few more days or even weeks to mend your finances before paying off the loan.
Loan amounts: Some payday loan companies don’t lend out the maximum amount of money allowed by the state. If you are in need of more money than what most companies lend, shop around and find a company that suits your financial needs. But be careful, you don’t want to take a chance on a shady company just because they will loan you the extra cash. |
|
Service: You want good service and you want the company to be efficient. Many payday loan web sites approve payday loan applications within several hours after they are filed. There are also some that can expedite the loan process at an even quicker rate.
As you can tell by now, all payday loans are short-term loans. The amount has to be returned with the interest within a month; sometimes within weeks. Lenders may employ different methods to get back the money. The most popular of these is the post-dated check system. The check is dated for presentation on the desired date. On the specific date, the amount is automatically cut from the borrowers account. For this purpose, some loan providers would require the borrower to have a checking account. Remember, most lender will present this check electronically to your bank on the due date. So don't assume that you have 3-5 additional days from the due date due to mailing and bank processing. If your account doesn't have sufficient funds, you will be charged a check return fee and will be considered in default under the original loan terms.
There is also a another class of emergency loans that requires collateral. You probably have heard of "title loans". These loan use your vehicle as a collateral to finance your short term cash needs. Defaulting on these loans will have severe consequences since you may end up loosing your vehicle. If you default on a unsecured loan, worst thing that can happen is the court judgment against you and even that takes months. However, title loans could take away your vehicle as soon as you default. Remember, payday loans are usually not a good idea to start with. And if you have to use them, make sure you go the non secured payday loan. Title loan could get you more money that any payday loan but it has serious consequences as well. Even though best payday loans present a convenient method of drawing cash during emergencies, they must not be misused. Most experts agree that as a borrowers, you must first collect enough knowledge to make a proper use of payday loans. IF you don't understand a loan, chances are it will cost you lot more than you could ever imagine.
|
