From time to time, we are all faced with situations that demand cash urgently. Whether you have a cash emergency or you just need a way to stay afloat until your next paycheck arrives, a payday loan can be an incredible option.
Mostly provided by individual and private lenders, payday loans are convenient and easily accessible, not forgetting that approval is often quicker than with conventional loan options. Assuming that you do not know so much about them, here are 7 unbiased facts about payday loans you ought to know.
1. You Can Get the Loan with a Bad Credit
One of the requirements to getting any loan is having a good credit score. Most lenders are keen on making sure you have this. When it comes to payday loans, you only need to be 18 years or older, employed, and with a checking account. Depending on the lender you approach, you may not even need any credit history to qualify. The requirements for approval are by far more generous compared to taking traditional loans from banks and credit societies in places like Canada. When taking payday loans from this Canadian lender called iCash, most borrowers qualify despite having a poor credit score. These are known as bad credit payday loans, which come in handy, especially when your application has been rejected by banks and credit other traditional lenders. Therefore, they make one of the best options for sorting out your mid-month financial emergencies.
2. You Can Always Extend the Repayment Dates
Like all other loans, payday loans have a set deadline for repayment. You are required to repay the loan once you have received your salary. However, it’s not uncommon for salaries to be delayed, especially if you are a civil servant. When this or anything else happens, and you find it hard to repay the loan, you can have the due dates extended, often at an extra fee.
3. You Can Apply For the Loan Online
This should have actually been the first point on this piece. One interesting fact about these loans is that you can easily apply for them online. This is usually the best solution, especially when your financial need has to be addressed sooner rather than later. All you need to do is to identify a credible lender that processes the loan within minutes and provides you with the cash within hours. Go to their website and ensure you understand their requirements, terms, and policies before applying.
4. The Loan Is Subject to Rejection
Payday loans are easy to apply for and are easily approved. This doesn’t mean that they cannot be rejected. You may be denied the loan if you do not satisfy the eligibility criteria. Prospective borrowers who fail to give accurate information when making a loan application, for instance, might be denied the loan as well. To eliminate the chances of denial, you need to make sure you are eligible and have given out correct information.
5. They Are Usually Short-Term
Payday loans are usually supposed to be paid at the end of the month since it’s when most people get paid. No wonder the loan is referred to as payday. As mentioned above, sometimes you are allowed to push the repayment dates forward a bit in case you are not able to meet the deadline. This is, however, often specified when taking the loan and is limited to several times. Each state has a limit to the number of times one can push the repayment date of a payday loan. The terms for these loans may also vary to accommodate borrowers who are paid weekly or fortnightly, for instance.
6. You Need to Write a Post-Dated Check
To procure the loan, you may need to write a check that includes the amount you have borrowed plus the interest it is expected to attract. The lender is left with the cheque, which they cash in on the due date.
7. High Interest
Payday loans are offered at a time when you need cash urgently. This means that the lender may try to make the most out of the limited time you have. This could translate into a loan with very high interest. This is one of the reasons it is very easy to process in the first place. It is also important to shop around and identify lenders who offer the best interest rates on these loans.
On a partying short, a payday loan can come through for you when you need money the most. It saves you the time and money you would have spent visiting your local lender, filling forms, and navigating other processes in between. It gives you peace of mind, considering that you can get the much-needed financial relief within minutes to a few hours if not instantly.