More often than not, payday lender receives a negative impression from the public. This is because people see them to be taking advantage of the financial challenges that applicants have and give high interests loan on a short term basis. But for those who are in need of payday advances, taking out such loan is the last resort for their predicament.
What Exactly are Payday Loans or Advances?
Technically, payday loan is small amount loan borrowed to be returned for short timeframe. Oftentimes, they’re paid on the next paycheck, hence the name.
A lot of people are taking advantage of payday loans contrary to popular belief.
This is to assist them in meeting financial setbacks like lacking of funds to pay for utility bills or if there’s an emergency to be addressed such as medical bill, car repair and whatnot.
A common period for this loan is 14 days with a limit of typically 500 dollars or less. However, there are lenders that are allowing applicants to loan to as much as 1,000 dollars. What truly makes this loan attractive is that, applicants do not necessarily need to have good credit rating to become qualified. On the other hand, you must know that this shouldn’t be used as a long term financial solution.
You must know that you’ll be charged with high refinancing fee that keeps accumulating month after month if you fail to repay the loan on the agreed date. If this is not addressed immediately, it will cause negative remark on your financial rating.
Who are the Candidates for Payday Loans?
Your credit score is never an issue when you apply for payday loan. However, there are other qualifications that must be met to be able to get an approval. Here are the basic requirements you must meet:
- Be a resident of the state where the payday loan is offered
- Submit proof that you have steady cash flow (job, alimony or other sources of income)
- Provide bank account information and Social Security Number and;
- Be of legal age (varies on the state you live)
So long as you meet these requirements, you can apply for payday loan and get high chances of approval.