Surveys have proven that the number of applicants for payday loans is growing by the day. It is important to understand how the whole concept of short term credits works before making an application. Short term credits are issued on a short term basis usually between 14 – 30 days. Other names that are used to refer to payday loans include check loans, cash advance and salary advance loans.
It’s understandable that once in a while everyone is going to run into financial obstacles that might necessitate temporary funding assistance in the form of short term credits. There’s nothing wrong with needing such a loan a few times in your life. The problems with this form of financing arise only when people become reliant on it and constantly are taking out loans that include hefty interest payments in relation to the time period and amount of the loan. Think over all of these factors before taking the next step and actually applying for a loan.
You’ve Applied; What Next?
Once you successfully apply for a short term credit, the amount plus interest is deducted on your next pay check. In situations where you fail to repay the amount as required, you can roll the loan over by paying additional fees to the lender along with the interest accrued over the roll over duration. Loan sharking is yet another terminology used to refer to the payday loans.
In most cases, people opt for payday loans because of necessity. There are certain situations when emergencies arise, which require urgent financial solutions. It may not be easy to ask for money from friends and family hence short term credits become a perfect substitute for this.
Venues to Pursue a Payday Loan
There are a myriad of payday companies that offer payday loans to their clients. Other than banks and financial institutions, one can make an online application for a short term credit or visit the institution physically. It is possible to make an online application for a payday loan online or visiting the lender physically. The advantage of using the internet is that you can make comparisons of the different offers that the lenders have.
There are certain conditions that must be met before a payday loan can be approved:
- One must be employed with a consistent income.
- The applicant must have a checking account.
- Applicant must be eighteen years and over.
- Applicant should be a resident of the country.
- The applicant should earn $ 1,000 every month
The best time to apply for a loan is Monday to Thursday since you will get the loan the following day. Usually, the loans are approved and credited on business days. If you make an application during the weekend, you should expect the approval and payment to be complete by the coming Tuesday. Therefore, the best time to make a payday loan application is between Monday and Thursday.
Approval Loan Process
It is important to acknowledge that the approval process for the loan application is extremely fast. It is possible to get the loan within twenty four hours of the application. This is why many people take out short term credits. The company will check out the documents and confirm these figures within a twenty four period. Usually, the data verification system is automated and is named VPN according to the software program. The entire procedure of identity verification and depositing of the funds should take less than24 hours. Some companies deposit the money in less than a day.
Average Costs of Payday Loans
The costs of the payday loans vary from one lender to another. Usually, $ 15 to $ 30 can be charged for each $ 100. Therefore, if an applicant borrows $ 100, he or she would have to pay $ 115 to $ 130. Keep in mind that the APR for the payday loan interest can go up to 391%. This should be considered before taking the payday loan.