Managing your budget can be a bit tricky and quite difficult. At one point or another, you may even find yourself short of cash days before your next paycheck. The need for instant cash then becomes unavoidable. And the fastest and easiest way to get it is with a payday loan. A payday loan is a type of short-term loan vehicle that allows you to borrow a small amount of money you need to survive until your next paycheck. It is a type of loan that can help you pay an unexpected bill or any financial responsibility immediately. Payday loan, therefore, is a solution to the temporary need for emergency cash.
How to apply?
Unlike other types of vehicle loans, applying for a payday loan is very easy. You don’t have to be backed by good credit to get approved for a loan. You do not need to submit tons of documents required for the loan. And you don’t have to wait days to get the money. All you have to do is find a creditor with the most favorable terms and apply online, by phone or at local offices. Your loan can be approved within 24 hours or even the same day. The requirements are simple: you must be at least 18 years old, you must have an active and in good standing bank account, and you must have a regular paid job. Some creditors ask that you must be employed at your current job for the last 3 months. Others may require you to have a checking account. Ether way, these requirements are for formality purposes only.
How does the payday loan work?
Payday loan works simple. Once you’re approved, the money you borrow will be deposited directly into your bank account, or if you apply in person, you can get the money right away. Payment terms vary. Many creditors require you to write a postdated check as payment, while some deduct it directly from your pay. The duration of the refund also varies. Creditors allow at least 2 weeks for repayment of the money you borrowed, but it can take several weeks depending on the length of the agreement between the creditor and the borrower.
However, prolonging the repayment of the loan is very detrimental to the borrower. Since this type of loan has a high interest rate, paying it for a long time is not profitable. Some payday loan companies offer an interest rate of up to 50% per week. That is, if you borrow $200, you have to repay $300 to the lenders after 1 week. The rate becomes more complicated once you forget to pay your creditor on time. The interest skyrockets and you have more financial problems than you originally had. There is a woman in Kentucky who borrowed $150 from a local moneylender. She promised to return the money plus the fee. Six months later, she was still short on cash and she discovered that her credit shot up to over $1000. She started receiving phone calls and threats that she will go to jail if she doesn’t pay.
The point here is that although the payday loan is very attractive and attractive for quick approval during the time of financial emergency, you should always know first if you really need it or not. It also doesn’t mean that even if you expect a paycheck in a few days, you may grudgingly apply for this type of loan just to satisfy your need for money. Always remember the price you have to pay once you apply for a payday loan. Remember that you have a binding contract with your creditor once your loan is approved. And this contract may cause you problems in the future if you can’t keep it.
There is a saying that you cannot borrow your way out of debt. Always remember this when considering a payday loan as a remedy for your financial problem. Use a payday loan only if you have nowhere to borrow money. Avoid the payday loan as much as possible. But if you have nowhere to go, use a payday loan as a final, temporary solution, not a first choice for your immediate financial need.