While loans and debts are not a great solution when pinched for cash, millions of consumers are finding themselves borrowing a few hundred from lenders to pay late utility bills, rent or buy groceries. These loans are known as payday loans or payday advances.
Payday loans are short-term, unsecured loans which are given on the same day you have borrowed and are payable within a month’s period or weekly deposits.
Based on a borrower’s income and credit profile, these short-term loans are a portion of the borrower’s paycheck and charge interest based on how much you can borrow. As such, the lower the borrowed amount, the higher the interest rate.
The appeal of financial technology is very high and studies showed that one out of five people is either servicing, has serviced or is thinking of applying for a short-term loan. This explains the adverts on social networks such as Facebook and emergence of numerous lenders.
To qualify for a payday loan, you need a verification of employment or source of income, must be above 18 years of age and must fulfill the terms and conditions set by different credit lending organizations.
You would be tempted to think that age has anything to do with the responsible use of money, but debtors need a national identification number to be able to locate defaulters.
The amount of loan available to a borrower is highly dependent on a borrower’s credit record or paycheck.
There are different ways of acquiring a loan, while traditionally one is required to locate a debt lender store or ‘shylock’ as they are commonly referred to, produce a recent paycheck, sign papers on payment plan and receive the money, then pay on the next payday, you can apply for such a loan online or via the mobile phone.
When applying online, you are only required to complete an application form, give details about your bank account and money will be transferred to your account and loan repayment will be withdrawn on the borrower’s next payday. In instances where a borrower is using the mobile phone, he is required to download the application of the lender, fill out details such as ID (Identification Number) and mobile number which allows the service provider to know if you qualify to receive money.
Ensure that you get a favorable rate. Different loan lenders provide different rates for different products. If you can get a fixed rate, it is the most ideal. This way, you are sure of the number of monthly installments needed as opposed to a fluctuating interest rate. Still on the fixed rate, look around to be sure the one you are provided with competes favorably in the market. Do not pay more than you should.
The temptations to spend without feeling a pinch may make you forget that you are borrowing from what you hope to earn and that debt has a price and may lead you to live from hand to mouth. However with the tough days to pay day, you may be tempted to take the easy way out.
Whatever decision you take, always ensure that you read and understand the terms and conditions associated with your lender of choice.
If you do choose to go for a payday loan, ensure that you do your homework to wade off scams. Be in control every step of the way and make your payments in a timely fashion to keep up a good credit score.
Most lenders serve within specific states. Depending on the state you live in, go online and simple search for lenders near you. Most banks operate nationwide. Private lenders like being close proximity to their borrowers. This helps to keep track of payments and easy recovery in case of defaulters.
Get started today. Fill out an application form and enjoy life’s little pleasures with a little less strain.