Are you interested in applying for a payday loan?
There’s a lot of negative information out there regarding payday loans, but they’re not all bad.
There are definite benefits that come with taking out payday loans, especially if you use them in a strategic way.
Read on to learn more about payday loans and the best practices to utilize when applying for them.
What is a Payday Loan?
For starters, let’s go over what a payday loan actually is.
A payday loan is a type of short-term bad credit loan. Most payday loans are meant to tide you over only until your next payday — the terms usually last for just a few weeks at a time.
Payday loans are typically for small amounts of money (just a few hundred dollars in most cases) and they often come with high interest rates.
Payday loans are meant to be repaid in full. They’re different from installment loans that spread out payments over several months or years.
Payday lenders may or may not consider a borrower’s ability to pay back the loan. They often do not take into account factors like your credit score or borrowing history.
Best Ways to Use Payday Loans
Payday loans can be a good option for some people, but they can cause problems, too, especially if you’re not using them the right way.
The following are a few different guidelines you ought to keep in mind before you consider applying for a payday loan:
- Only borrow what you need — over-borrowing (especially if you borrow more than you can pay back) can lead to very high interest rates
- Don’t spend the money on nonessential items — use payday loans for emergencies only
- Don’t use payday loans as an investment strategy — remember, if you can’t pay back what you borrowed, you’ll end up owing more money in interest
It’s also important to use your payday loan to pay off your highest priority bills like personal loans no credit check.
For example, if your car is going to be repossessed if you miss another payment, use the payday loan to help with your car payment. Don’t use it to pay your electric bill that only has a small fee added to it if it’s paid past a certain date.
Applying for a Payday Loan
Now that you know more about payday loans and the right way to use them, are you interested in applying for one?
The process of applying for a payday loan no credit check is pretty straightforward.
If you’re applying in-person, you will usually write the lender a post-dated check for the full loan balance, plus any fees associated with the loan. If you’re applying online, you will grant the lender access to your bank account so they can withdraw the full amount of the loan balance, plus fees.
If you’re granted a personal loan online, you will agree that the lender can cash your check or withdraw money from your account on the due date specified in the loan agreement.
If you don’t have the money to pay back the loan by that date, you will be out the money, plus any other fees associated with having an overdrawn account.
As you can see, it’s very important to make sure you’ll have the money to pay back the loan on or before the due date.
Who Can Apply for a Payday Loan?
Most people don’t have trouble getting approved for a payday loan. This is because most payday loans are no credit check instant approval, meaning payday lenders typically don’t look at your credit score or consider other factors that a traditional lender will consider.
At the same time, though, there are still steps you can take to increase your chances of approval.
Start by making sure you meet the basic requirements for approval. These vary state by state, but they usually include the following:
- Have an active checking account
- Provide proof of income (bank statements, check stubs, etc.)
- Have valid identification
- Be at least 18 years of age
If you have declared bankruptcy recently, you may have a hard time getting approved for a payday loan. Self-employed individuals sometimes get denied payday loans, too, if they cannot provide proof of income.
Payday Loan Borrowing Limits
The amount of money you can borrow from a payday lender will vary depending on your income. Each lender has its own limits, too.
The amount of money for which you qualify can also vary depending on your state. Some states have a maximum amount of money you can borrow from a payday lender.
Some states also put a limit on the number of outstanding payday loans an individual can have at one time. These regulations are in place to help protect consumers from borrowing more money than they can afford to pay back.
Be sure to keep these limits in mind before you apply for a loan.
Finding the Best Payday Loans
Before you apply for a payday loan same day cash, it’s important to make sure you’re applying for a loan from a credible lender.
There are a lot of shady individuals out there who are not actually lenders but are brokers who sell your information to lending companies.
Before you apply for any loans, make an effort to verify the lender. Look for contact information and a physical address on their website.
Do some research, too, to see if they’re accredited by the Better Business Bureau. You should also check to see if there are any complaints against them (with the BBB or another entity) before you give them any of your personal information.
Apply for a Payday Loan Today
Do you think that a payday loan a good option for you? Are you thinking about applying for a payday loan?
If so, be sure to keep this information in mind to help you find the best payday lenders and increase your chances of getting approved.
If you’re ready to apply for a payday loan, apply online with us at Bonsai Finance today.
We make it easy for you to do so, and we’ll get back to you quickly to let you know if your application has been accepted. Here are some other articles that might be helpful: