What is a payday loan?
A payday loan is a financial tool that someone can use to borrow against their upcoming paycheck. It is considered a short term loan and allows for someone to get an advance on something they will already be receiving - the price can range anywhere between $200 and $1,000. Often, this money will be lent with just a small fee with the expectation for it to be paid back in just a few weeks.
A payday loan is an excellent tool for someone who has recently been slapped with an emergency and is in need of money fast. There are instances in which someone cannot afford to wait two weeks until their next payday and require money instantly. In situations of this nature, it is vastly important that they receive a loan as soon as possible - payday loans offer this fast and easy solution.
Qualifications to Receive a Payday Loan
For many people, the qualifications associated with payday loans are lenient and allow for much easier approval than a typical loan. The general qualifications that are accepted for a payday loan includes being at least of eighteen years of age, having a steady income (no matter if from a job or income from certain benefits), having a banking account, having a working phone number and living within the country.
That's it! While these qualifications might vary from state to state, those are the general guidelines that are applied towards those who are seeking a payday loan. Even for those who have bad credit or no credit, a payday loan is usually the answer - usually lenders will not even check your credit score. Unlike a traditional loan, a payday loan is not based on your credit score, but rather on the factors listed above. Even someone with bad credit doesn't need to worry as you could still be approved.
Overdraft Protection vs. Payday Loans
Many banks allow for customers to sign up for what is known as overdraft protection. This is simple - by signing up, they agree to pay a flat fee if they overdraw upon their account. This saves them from bouncing any checks or the fees that come with an overdraft. This, however, is not always lucrative. If a consumer pays for a program that has a $30 fee, they must pay this overdraft protection fee every single time that they overdraw on their account.
If they make three purchases in one day that are over their account, they must pay $30 three separate times. In the same breath, regardless of whether that same person overdraws on their account by $200 or by a single cent, they must pay that same exact fee. On the other hand, a payday loan comes with one small fee. There are no reoccurring fees with each transaction and there is no negative balance on your checking account.
The Process of Applying for a Loan
The application process is simple! By applying online, the process can go as fast as sixty seconds. All a consumer will need to do is to input their information including details such as full legal name, social security number and home address, whether they own a home or not, phone numbers and email address. From there, they must prove that they are of legal age and must provide two references and bank information.
By continuing to fill out the form, the consumer will then provide information regarding their income as well as their employer. That's it! Once the form is filled out, it will be submitted for review and the consumer will be later notified as to whether or not they've been approved. Approval can take as little as a few minutes. In many instances, the money will then be deposited into your account within 24 hours.
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