You see them everywhere. The joke used to be a church on every corner. Instead, perhaps a sign of the times, we now seem to have a cash loan place on every corner. Interestingly, many states have enacted regulations prohibiting payday loan places from operating in their states. Let's be real here. If you have financial problems, going to a payday loan place is not an option for you. These establishments were never meant to solve long-term financial problems. If, however, you just need a little cash to tide you over until your next payday, then these places are a definite option, hence the term payday loan. This article will give the reader some basic facts about short term funding, as opposed to title loans, and what to expect from a cash advance loan.
The biggest reason people have issue with these short term loan establishments is the interest rate these places charge. It is a valid concern. Most payday loan interest rates are 456 percent for a 2 week period. That amount sounds staggering. The amount is usually the equivalent of $17.50 per $100 financed. So, if you borrowed $500, as many people do, it would cost you $87.50. If you repaid the loan in two weeks, however, which is supposed to be the point of a payday loan, this amount, though high, is not impossible, especially for people who have little to no other options. If, however, you take out payday loans, knowing that in two weeks you will have just as little money as you do now and have little hope of repaying them back, you will run into trouble. For this reason, other options are a good idea, such as contacted a credit counseling institution like Money Management International, as payday loans will not help you.
While most people are approved for a quick cash loan instantly, there are documents you are expected to bring with you to become qualified. Otherwise, it is likely that you will be turned away until you can produce such paperwork. Typically, payday loan places are going to ask you to bring your last two paystubs, a bank statement, two forms of identification, and a personal check, which will be held until your payday. What might be required does vary according to state.
Usually, the payday establishment will require that you fill out an application, giving not only your contact information, but also three references, and verification of employment and income. Some establishments might also ask about your vehicle and acquire vehicle information from you. The information you provide is usually processed on the spot and a decision is rendered about money you may borrow. How much money you are permitted to borrow will be determined by your income information and may range from $100 to $500 dollars, though some establishments might offer as much as $1000.
Most people opt to visit a payday loans establishment because of the convenience of borrow a bit of money to help them get through a budget tight spot. Though they may not be right for everyone, if the arrangement is a temporary one, these places are an option for most consumers.
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