In this article you will get information about common questions being raised by payday loan borrowers to lenders. The common questions such as “What is a payday loan?”, “What are short term loans?”, “What is interest rate?”, “How soon to pay?”, “Does it require payroll information?”, “Do lenders check you credit history?”, and same day bank transfer possible etc. Borrowers are also asking questions such as “Is it risky loan, spiraling into high interest loan?” etc.
1. What is a Payday Loan
This loan is an unsecured loan given to borrower till he or she receives next paycheck. In other words loan is given against the guaranty of next paycheck. Typically the need of this loan comes as emergency need on part of borrower such as car repair, medical emergency or unexpected bills etc. These loans existed earlier also and were called as private loans. These loans came with higher interest rate. The reason for higher interest rate was readily available and with less documentation. Same loan features are provided under payday loan term. The difference is loan is given against next paycheck. The length of loan is 2-3 weeks.
2. How to Qualify for paycheck Loan
Well qualifying process for paycheck loan is easy and does not require long procedural documentation process as in the case of traditional loan with banks. The basic requirements of loan are very few:
1) Applicant must have a current job
2) Applicant should have age more then 18 years old.
3) Applicant should be United States Citizen
4) Applicant must have a saving or checking account with any American bank.
5) Applicant must earn at least $1000 per month to avail a small loan as $200
Please be aware some states in America have their own laws governing payday loans. In some state such loans are banned and also length of the loan period is fixed.
3. Length of Loan process
Since a payday loan is backed with technology the approval process is fast and typically money is wired to applicant’s account with 24 hours. Different states and lenders have their own terms an conditions, before applying check with staff for complete details. The online process is simple and can be completed in few steps. The important thing to remember is during this online application process you will be entering personal details, social security, driving license number, and payroll details. Be sure and confirm first with customer care and get all details you want to know.
4. Can person with bad credit apply for such loan?
Most of the lenders are able to work with people with bad credit. Since loan is given against payroll check from current job and that is the reason lenders omit background d check. However different lenders have different set of terms and conditions.
5. Length of Loan term
The typical length of loan term is 2-4 weeks max. Since loan is given against your monthly or bi-weekly payroll check the loan length is less then 4 weeks.
6. How secure is online application process?
Well lenders are dealing with applicant’s personal, payroll information so they have placed max security precautions on their website. If you read information on their website you will see Secure Socket Layer (SSL) encryption technology seal on their website. They have to ensure users are given secure way to input their personal details.
7. When to use this service?
This service shouldn’t be used as excuse to get some extra cash for party, vacation etc. Use a payday loan only in very emergency situations when you are not able to arrange funds from any other sources. short term loans should be availed only when you know you can pay back with in stipulated time. NEVER TAKE MULTIPLE PAYDAY LOANS.
8. Why are so much negativity about these loans?
Since these loans come with higher interest rates and if not paid on time lenders will raise penalties and interest more. Some people use multiple loans and end up paying multiple higher interest on loan and eventually fall behind the payments and come under debt. Also some lenders charge higher penalties once borrower misses due payment. All these things have made paycheck loans less popular.
9. How much documentation is required?
Since this is online application process most of the information is your personal details and payroll information. Some lenders may require extra information if the required given information through online application is not enough to award a payday loan.
10. Read, Review and Confirm
Loan borrowers should read, review terms and conditions of loan lenders before applying for a loan. Get you clarifications confirmed from customer care staff.
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