No matter how much a person earns; paychecks always seem less especially when there are some really important tasks to do. If you are also facing a small time emergency and are seeking financial help from your friends or relatives, you can also consider the option of applying for payday loans. Not aware about payday loans? Payday Loans referred to as advance cash loans, quick or fast loans, these are short-term loans that a person can avail within just 24 hours. Just as the name suggests, these loans have to be paid back to the money lending firm on the next paycheck date. However, there are even circumstances when people fail to pay back the credit. During such instances, the due date is rolled back and the borrower is entitled to repay when he/she receives next paycheck.
It is interesting to note that a money lending company doesn’t go through the borrower’s credit history while approving payday loans. So even if a borrower has a bad credit, he/she really doesn’t have to worry about it.
Benefits of payday loans
1. Easily accessible
2. Hass free process
3. Speedy application procedure
4. One can apply online at anytime and from anywhere
5. Lenders do not check the credit history
6. The desired amount gets deposited into borrower’s bank account instantly
7. Confidentiality is maintained
8. Paperwork is lowered
9. All transactions are safe
Also, undoubtedly processing of payday loans is very simple and it gets approved within just one day; but there are risks involved in availing these loans. This is an unsecured loan and one thing that a borrower must know is that rate of interest charged on payday loans is higher than that charged on other types of loans. And again, if a borrower decides to get the due date extended due to unforeseen circumstances or unavoidable reasons, there are additional charges or fee that is charged, both very high. One will have to face these serious consequences on failing to repay the loan.
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There are certain points that must always be kept in mind before applying for payday loans. Some of the important ones are as follows:
1. Are you qualified for payday loans: Before applying, you must ask yourself if you are eligible to apply for payday loans? For this, you have to be at least 18 year old or above. You must also have a permanent job and should have been working in the organization for at least six months.
2. Choose a reputed money lending firm: You can find scores of companies which are ready to provide you payday loans. However, before applying for these loans, you must explore the market, surf over the internet and then decide from which company you are going to avail quick loans. It is always advisable to avail such loans from a reputed money lending firm, which abide by all the rules and regulations.
3. Fill the application form carefully: No doubt, while applying for payday loans, the borrower only thinks about money. But during this process, the application form must be filled in carefully. All the personal information, bank account details as well as information related to current employment must be furnished with utmost care.
4. Rules and regulations must be read: In haste, never forget to read the rules and regulations of the money lending company regarding payday loans. Make sure you don’t end up paying much more than the actual amount. Many lenders also have hidden costs or charges that get revealed at the time of repayment. And so you must ask the lender beforehand to inform you if there are any hidden charges.
5. Decide wisely: Before signing the application form and submitting it, a second and final thought must be given. You must calculate the rate of interest and the total amount to be paid on due date beforehand so that you don’t feel ditched at the time of credit repayment. Besides this, a thorough research would also help you in knowing about the best deals so that you don’t end up paying really high.
It is no sin to apply for payday loans but there are many people who fall prey to such loans and get addicted to them, thinking it is easy-to-get and so to use. Meanwhile, the money that you borrow must always be used for genuine purposes like renovation of house, unexpected repair of car, pending insurance EMIs, medical bills, tuition fee and the like. If the credit amount is used for not-so-important purposes, you may end up facing serious consequences.
To make it easier for borrowers, money lending companies have come up with an application form available on their websites. This makes it simpler for borrowers to apply for fast loans just while sitting at their homes or offices. Not only this, the online application form procedure also has led to reduction of paper work and long queues that were common earlier.
The next step is to fill in the form in which the borrower provides all required information and also the official documents that the lender asks for. After the required information is furnished, the firm approves the loan and deposits money into borrower’s bank account. In return, the borrower has to pledge repayment of loan at his next paycheck date. He/she also has to give a check of the amount to the lender so that latter can debit it on due date. The process takes not more than a day to complete. Generally payday loans are given for a period of 2-4 weeks and it has to be paid back with high rate of interest.
Keeping in mind the pros as well as cons of payday loans, a person must carefully apply for these short term and unsecured types of loans. Also, one can consider borrowing some amount of money from friends or family members before borrowing the amount such money lending companies. See around and take a wise decision in the end!