Payday loans is a increasingly popular method for getting cash fast when you need it. Above all, payday loans are short term loans used to help people in need of immediate cash. These cash advances are normally repaid back within 1-4 weeks based on terms of the loan.
First of all, these small dollar advances are a great way for a person to get cash fast for many different reasons. For example, here are just some of the reasons why people seek out payday loans:
- Overdue Bills
- Car Repairs
- Extra Disposable Income
- Unexpected Expenses
Secondly, payday loans are popular because cash is generally deposited into accounts within 24-48 hours. Also, payday loans are extremely credit friendly. For instance, even people with bad credit can still get approved. Most noteworthy, here are some of the basic requirements:
- 18 years of age (Some states may require the person to be at least 21 years old. So, its key to know the rules)
- Be a US Citizen
- Currently employed
- Valid Checking Account
- Valid Telephone Number
- Current Email Address
- Current Home Address
What Are The Terms And Costs Associated With PayDay Loans?
First of all, it’s important to note that terms are based on state as well as lender. Also, despite getting approved with fair and bad credit, an overall credit situation could play a role in the fees.
However, here are some of the most generic terms that generally apply across the board:
- Loan Amounts: Loan amounts can vary from as little as $50 all the way up to $5000. Most noteworthy, on average, payday loans generally spread from $100-$1000.
- Costs of Loan: As stated above, cost is based on state and loan amount. However, generally for every $100 borrowed, the fees can range anywhere between $10-$30 on average. Shorter term payday loans are generally cheaper. For example, a loan of $100 can cost as little as $15. In contrast, loans that are taken out for longer periods of time can be slightly more costly. Before accepting any agreement, the terms of your specific loans will be presented to client for final approval.
How Does PayDay Loans Affect Credit?
Also, in most cases, payday loans have no affect on your credit. For instance, as long as clients are eligible as stated above, there’s no credit check. However, a lender may perform a soft credit check if additional info is needed during approval. So, in general, applying for payday loans will not negatively affect credit. In short, credit will only be affected if someone fails to pay back the loan and the loan becomes delinquent.
How Does Someone Go About Repaying Cash Advance?
In general, payday loans are required to be paid back by the next paycheck. However, because of the different repayment terms from different lenders, this date could be different. Make sure to go over these details during the application process. Also, in most cases money is automatically drawn from a checking account. Almost all payday loans lenders require clients to have a checking account.
Are They Worth It?
In short, if you need cash and have nowhere else to turn, these short term loans can be a lifesaver. These cash advances will help you get back on track fast. There are finance fees attached to these loans. These fees can be substantial. However, these short term loans provide an out for people with all credit types. This includes bad credit. In contrast, with big banks, you will have to have great credit and possibly a co-signer or collateral. Also, keep in mind that big bank loans does affect your credit for each inquiry.
So, are payday loans worth it? The answer is yes. The key is to know the terms fully. Also, repay your debt on time to build trust with that lender and to prevent more added fees.