Payday loans claim to give those with little opportunity or availability to borrow money the chance to get ahead a little bit for once. Imagine a world with no loans whatsoever, it would be a world completely stifled for innovation.
What’s really sad is a lot of other loans out there meant specially for lower-income individuals’ prey on people and get them stuck in the endless cycle of debt.
Payday loans are a good option for anyone at all that just needs the chance to get ahead on something. Let’s dig into just how payday loans and some other major types of loans work.
What is a Payday Loan? How do You Get a Payday Loan?
Now first off even if you haven’t heard the term payday loan you’ve likely heard one of the following: cash advance, short-term loan, payday advance loan, fast cast or fast loan, bad credit loan, deferred deposit transaction, and paycheck advance.
Typically, payday loans are for a small dollar amount (a loan from $100 or less to around $1,000 or $1,500) and the term (length of the loan) will be two weeks so that you can pay a lump sum with your neck paycheck. Hence the name payday loan. At least that’s about how it should work, don’t expect to see much deviation from that, and if you do be wary.
Repayment terms will be settled before anything happens and any money changes hands. You will have to either give them access to withdraw what you are due electronically or you will have to leave a post-dated check with them for the amount.
Now the thing is the people that are the targets of these loans generally have little money and no credit worth mentioning, or just for one reason or another need immediate access to some cash they don’t yet have.
Qualifying for a Payday Loan
It is so easy for just about anyone to qualify successfully for a short-term payday loan. The important thing is that because of the information gathered the lender is NOT going to run a check on your credit to decide if they want to lend to you or not.
You simply need to make sure you have an open active checking account that is in good standing (positive balance). If you have that you then need to show proof of identification and of regular income – the best way to do this is to bring your driver’s license and ideally your last 2 pay stubs.
Believe it or not, that’s it. Believe it or not, that’s all the information you need to apply and likely get approved for a payday loan. Now there is risk involved that can’t be overlooked. You need to know that you’re going to be able to repay your debt within the term that you agree to unless you want to risk the chance of falling into a payday loan trap.
An endless cycle of almost paying it off, but that bit of interest after your term ends really catching up with you and running up the tab. Never take a loan that you aren’t 100% sure you can pay back.
Oleg, from integratedloans.com states, “payday loans are a fast way to get cash fast,
What is So Great About Payday Loans?
Well as we discussed above payday loans are incredibly easy to access. Nearly everyone out there can qualify for a payday loan on the spot, many vendors and lenders are going to give you cash within 24 hours after deciding right on the spot.
You’ve probably driven by some of these locations at odd hours and noticed that they never close – many payday loans and title loan lenders are going to be operating 24 hours a day and 7 days a week.
You can even apply online for most payday loans today. A traditional loan at the quickest is going to take a week to be approved and longer yet for the money to move. A cash payday loan is going to get you to cash in hand the same day if you need it.
Fewer Application Requirements
A traditional loan is going to need you to produce, at the least, a valid identification, your social security number, proof of regular income, and they will also run a credit check to determine your ability to repay loans. So, unlike a personal loan from a bank or other institution, a payday loan in Rock Hill SC has far fewer requirements before you can apply.
- Be 18 years of age or older
- Have a basic state-issued ID like a driver’s license or social security number ready
- Be employed regularly or have consistent income with pay stubs or other documentation to verify your regular payment
- You need to have an active bank account for money to be deposited to or withdrawn from.
No Pesky Credit Check
You may not be aware but if lenders request your credit too many times it will begin to negatively affect your credit score by a fair amount of points. A payday loan charlotte bypasses all of that with no credit check required.
With that said a payday loan is NOT going to appear on your credit and help boost it if you pay it off on time, so if you are looking to borrow with some intention of boosting your credit score you will have to go through a more traditional channel that requires a credit check more than likely, or just ask your local lender if they will take the time to report your timely repayment.
Do be wary of the incredible interest rates which can be associated with payday loans in some states. That just reinforces the fact that you need to be able to pay this loan back on time. The luxury of a simple loan is that if you don’t pay it back you are going to get into a serious interest trap.
Be sure to check the laws for your specific state regarding payday loans as some states have outlawed it while in others it is completely legal.