Payday loans have become a reliable way for many Americans to overcome financial emergencies. For consumers with poor credit who have been denied traditional bank loans, a payday loan can be a saving grace to take care of unexpected expenses or to help cover a recurring bill when money is tight. If you are considering taking out a payday loan, you should be aware of your options for obtaining this type of financial relief and typical loan terms.
Compared to applying for a loan at your bank, getting a payday loan is a quicker and more efficient process. As long as you can supply proof of employment and income, such as your pay stubs, and submit a few personal details, you can qualify for a payday loan.
In addition, lenders typically require you to provide a government-issued photo ID, your checking account number and routing information, your Social Security number and your home address. Your name will not be submitted to a credit bureau, so you can rest easy if you have a poor credit score.
The amount of money you can borrow and loan terms are determined by state laws. For example, in Louisiana, you can only borrow up to $350 for up to 30 days. In Illinois, the maximum loan amount is $1,000 or 25 percent of your gross monthly income, whichever is less. Lenders in Illinois can set the loan period from 13 to 120 days.
Some states also have restrictions on how many payday loans you can take out at time and lender interest rates. When you obtain your loan, you promise to pay it back within a set amount of time, typically around the time of your next payday.
Many payday loan lenders have offices where you can apply for your loan in person. This option may be convenient if you live or work near the lender's location.
Payday loan offices have more convenient hours than banks so you can apply during the evening after work or on the weekend. You can receive a printout of your loan application and terms if you apply in person.
Some lenders also offer other financial services such as check cashing, bill payment and money orders.
Online Payday Loans
If you are short on time or do not live near a payday loan office, you can also apply online. This option is also convenient if you are feeling embarrassed about having to take out a loan and do not want to face someone in person to get financial help.
Many lenders provide secure websites for you to enter your application details. Some also provide toll-free numbers so you can call and speak to a loan representative if you have questions about the process.
Once you submit your loan application, lenders will generally provide you with a loan within a few days, and sometimes within 24 hours. The money will be deposited directly into your checking account.
In the event that you are unable to pay your loan back on time, you should contact your lender as soon as possible to apply for an extension. Many lenders will work with you to provide you with additional time. The interest rate on your loan may rise if you request an extension. However, some states, such as Oregon, put a cap on how much lenders can raise rates for loan extensions.
When you first apply for a payday loan, make sure to read the terms carefully so you will know the exact deadline for asking for an extension. If you are able to pay back your loan early, depending on where you live, your lender may be obligated to refund a prorated amount of the loan's interest rate.
For more information about the process or to apply for a loan, contact a company like Payday Express.Share