4 Things To Consider When Getting A Payday Loan
Are you seriously considering a payday loan to come up with the funds that you need for an urgent situation? If so, you'll want to know the following things about this unique type of loan.
The Process Is Fast
One of the most appealing aspects of a payday loan is that the approval process is incredibly quick. If you are in a tough financial situation and need money that you do not have, a payday loan can be the best way to come up with the funds in a pinch. You can expect to get approved for a payday loan on the same day you apply. This is simply not possible when you use a traditional lender for a personal loan, which will go through the underwriting process for a very long time.
In addition, the funds are going to show up in your account quickly. It is common to receive the money by direct deposit and to have the money show up in your account by the next day.
The Verification Process Is Simple
A payday loan is not going to require a credit check to be approved. The main concern is how much you are paid and if you will be able to pay the loan back with your next paycheck. This means that you need to submit pay stubs, bank statements, or some other proof of income. Know that having bad credit is not going to be an issue when it comes to getting a payday loan.
The Interest Rate Is High
Since payday loans are for people who are not in the best financial situation, they are riskier to the lender who provides them. As a result, the interest rate on a payday loan can be quite high, with an interest rate averaging around 391%. This means that if you borrow $100 you could owe around $20 in interest. The interest rate is set so high due to the number of people that do not pay back their payday loans.
The Loan Is For A Very Short Term
A payday loan has a term that is designed to be paid back by your next paycheck, which means that you'll typically pay back the loan in a couple of weeks. However, you have the option to renew the loan if you are not able to pay it back in time. This can give you some flexibility if another unexpected expense comes up.
Keep these tips in mind when looking for an instant payday loan service near you.