There can be times when you’d need money immediately. It can be for a medical emergency or some other unforeseen expense.
Now, if you’re not qualified for a personal loan to cover this need, you can go for a payday loan.
This type of loan, sometimes known as a payday advance, provides quick cash for up to $1,500.
You typically need to pay whatever you borrowed plus interest and fees on your next payday.
These payday loans often come with high-interest rates and fees.
But, they can be a convenient way to cover unexpected expenses. It can be a last resort for people strapped for cash.
Here is a quick guide to how they work and what you need to consider.
How Do Payday Loans Work
A payday lender can provide you with a short-term loan (usually between $100 and $1,500). You pay it back when you get your next paycheque.
You can visit a payday lender available in your area to apply for one. There are also fast online solutions that offer payday loan applications.
The lender will examine your bank account information and income. Once approved, you can get your cash within the hour or the day of your application.
This usually depends on whether you applied online or in person. Either way, you can be sure to get the quick cash you need.
What You Need to Get a Payday Loan
To meet the requirements for a payday loan, you will need to provide proof of income. Payslips are the most common form of evidence.
You can also use tax returns, Social Security payments, and any other type of income information.
You should also bring a photo ID to prove your identity. One of such IDs is a driver’s license. Finally, you will need to present an active checking account verified by a bank statement.
How to Settle a Payday Loan
Terms and conditions usually differ from one lender to another. So, you must read and understand your lending agreement before signing.
This will show your interest fees, costs, and your due date. Make sure to ask if you have any questions or clarifications.
When a payday lender grants you a loan, they will also ask for access to your bank account.
You can do this by providing a pre-authorized debit form or giving them a post-dated cheque.
What Happens If You Don’t Repay a Payday Loan
In many areas, lenders cannot roll over your payday loan. Failing to repay the loan can trigger late fees and non-sufficient fund fees.
You may also be charged bank fees. If a lender is still unable to collect the funds, they can send your loan to collections. This can mean the payment of additional fees.
What to Look for in a Payday Lender
When choosing a payday lender, you want to ensure that they will offer you a safe and secure place to borrow money.
The best payday lenders will go above and beyond to meet customer needs and concerns. Here are the primary things you should consider:
- Security. A suitable payday lender will ensure that your financial information is safe. This factor should be put in high regard, especially with online payday lenders.
- No hidden fees. Always look for transparency in a lender’s policies. They should not charge monthly maintenance or other expenses that might surprise you at the end of your borrowing cycle.
- Professionalism. Look for licensed lenders in your province or territory. This can ensure you that they abide by all applicable laws.
Bottomline
Consider applying for a payday loan if you need money but don’t have time to wade through many loan offers.
It is a fast and convenient method to get much-needed funds.
But, you must pay on time and find a qualified and reputable lender.