Need to work on your credit, but need cash now?
A payday loan can help you get money quickly for emergencies or unforeseen expenses.
While payday loans may have a poor reputation with many consumers, if used properly these loans can help you get out of a jam quickly. Just make sure you understand the terms and know what you’re getting into.
Thinking about getting a payday loan? Keep reading for a look at payday loan requirements and some things to consider before applying for one.
Payday Loan Requirements: What Kind of Income Do I Need?
The first and most important requirement for getting a payday loan is income. When applying for a payday loan, you must be able to show proof of some sort of recurring income.
If you just got a job and haven’t even received a paycheck yet, it will probably be difficult to get any kind of loan. Even a payday loan. Before applying, gather your paycheck check stubs.
What if I’m Paid on Commission?
If you’re paid on commission or rely on additional income like tips, don’t count yourself out. If you can show that you consistently make a certain amount of money, you may still be approved.
Getting Approved for a Payday Loan
Besides consistent income, most payday lenders will also require you to have a checking account and provide basic contact information and a social security number.
If you’re currently involved in a bankruptcy case, you’ll probably have a hard time getting approved. But you may be eligible if you’ve declared bankruptcy in the past.
Payday loans are not nearly as difficult to get as a car loan or a mortgage. Just bring your basic contact information, including a state-issued ID and proof of income.
Things to Consider Before Getting a Payday Loan
Before you take out a payday loan—or any loan—it’s very important to consider the terms of the loan, as they are different from other types of loans such as installment loans and loans for bad credit.
Will you be able to make the minimum payments?
Will the interest end up costing you more than the loan is worth?
What happens if you can’t repay the loan?
In the right situation, a payday loan may be very helpful. But, you must pay attention to the terms and make sure you can meet the repayment requirements.
Don’t just listen to what the loan company’s tells you either. Read the terms yourself. And be sure to read anything you sign carefully. With the average American now in at least $10,000 in credit card debt, it’s clear that debt is easy to get into but tough to get out of.
Other Types of Loans
Payday loans aren’t the only type of loan available in emergencies.
If you need to pay for something quick and don’t have the cash, a credit card is another great option. Credit cards often have lower interest rates and easier payment terms than a payday loan.
A personal loan from your bank is another good option if you have good credit. A personal loan will also have much lower interest than a payday loan.
Sometimes you need money quickly. If you don’t have great credit or a lot of income, a payday loan may be your only option. Just make sure you pay attention to payday loan requirements, understand the terms, and are able to repay the loan.
Learn more about payday loans and how to avoid borrowing more than you can afford.
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