One in ten Americans borrow money through payday loans at some point in their life. This short term lending solution offers immediate financial relief if you are facing an emergency that you cannot afford.
If you need money fast to hold you over to your next payday, you may want to consider a payday loan. Before you agree to borrow, read this article, so you know what exactly you are agreeing to.
What Is a Payday Loan?
You may hear of a payday loan referred to as a cash advance or payday advance. These are smaller loans that you borrow against your next payday.
Taking out this type of loan can help prevent you from having to pay bank overdraft fees or late payment fees on due bills.
These loans are short term financial obligations. They are not meant to be long term financing solutions.
How to Get a Payday Loan
The process to obtain a loan will vary slightly depending on the lender you go to. But the overall steps will remain the same.
The first thing you will need to do is fill out an application. The lender will then review your request and make a decision.
If you agree with the loan amount and repayment terms you will need to sign the loan documents. This is your written agreement to borrowing and repaying the loan per the lender’s terms.
Once the lender receives your signed documents, they will send you the money. If you applied for your loan in person, the lender will most likely hand you cash. If you apply online, the lender will have the money deposited into the account of your choosing.
Once you receive the money, your job is not over. Now you need to repay the loan per the terms. Usually, this means you need to pay the lender back within two weeks.
Qualify for a Loan
There are a few requirements you will need to meet to gain approval for a loan. First, you need to be at least 18 years old. Minors cannot legally contract in the United States.
Next, you need to have an open and active checking account. This is where the lender will put your money.
Since these loans are based on the assumption that you will pay them back with your next paycheck, you need to be able to prove your income. A pay stub from your employer will work for this.
Finally, you need to have a valid phone number and proof of ID. Most lenders will accept a driver’s license or state ID.
Start Comparing Payday Loans
Now that you understand what a payday loan is, you are ready to start comparing rates and looking for a lender. Having your information and documentation available will make applying for payday loans faster and smoother.
Check out these payday loans that don’t require a credit check.
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What is a Payday Loan? Here’s Everything You Need to Know