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Fast Cash: What You Need to Know About Payday Advance Loans More and more people are facing a financial crunch. So much so, they’re seeking financial relief any way they can. That includes payday loans. Payday advance loans appeal to people of all ages, including college students. About one-third of college students consider payday loans to make ends meet. They’re part of the 12 million Americans who take out payday loans every year. These loans have a reputation for being predatory loans. If that’s the case, why are they so popular? If you’re considering a payday loan, there’s a lot that you need to know about them so that you can make a smart financial decision. Read on to learn the basics about payday loans before you take one out. What Are Payday Advance Loans?
How would you like to get a cash advance before your next paycheck? That’s what a payday loan is. It’s a small loan, averaging about $500, that is meant to be a short term loan. You pay it back between 14-30 days plus fees for the loan. That’s usually the time it takes for you to get your next paycheck. People will turn to payday loans to pay for basic expenses like rent and utilities without having to ask for money from family or friends. They may have bad credit or have maxed out their credit cards and feel like they’re out of options. Payday Loans as a Financial Tool If you're not careful, payday loans can cost you more than the loan itself. That’s right, a payday advance loan for $500 could cost more than double that if you don’t pay the loan back on time. Let’s say that you took out a payday loan assuming that you’ll get paid in two weeks and you’re able to pay back your loan on time. You may have had to call out from work for a couple of days, which would make your paycheck lower and unable to pay the loan back in full. What happens is that you’ll take out a new loan and roll the old loan over, which can result in more fees. When you do take out a payday loan, you have to be clear as to what the fees are and when the loan needs to be paid back in full. It's ultimately your responsibility to make sure you take out only what you can afford. That will save you from further headaches down the road. How to Get a Payday Loan You may not have the luck of the Irish, but you can get a payday loan. The payday loans industry is a regulated industry. These regulations are being rolled back at the federal level, but states also have their own rules and requirements for payday loans. These laws tend to define how much you can borrow and how much payday lenders can charge in fees. Some states have completely banned payday loans. These states include New York, New Jersey, Arkansas, and Arizona. Other states have very strict requirements for lenders to protect the public. In Hawaii, for example, the state created a law that capped the loan amount at $600 and the loan period is only for 32 days. The Amount You Can Borrow The amount you can borrow depends on your lender’s location, your state’s regulations, and your ability to pay back your loan. There are lenders that operate online and have their primary location in a state where the laws aren't as strict. If you go to a retail shop in your state, the lender is still required to comply with state laws regarding payday lending. Your income is going to be the biggest determining factor when it comes to the amount you can borrow from a payday lender. You need to make sure that you have proof of income, like a W-2 form or a few recent paystubs. With all of the requirements and regulations surrounding payday loans, it may seem impossible to get a loan for the amount that you need. The easiest payday loans to get are the ones that don’t run a credit check. They’ll require age and income verification. Applying for a Payday Loan Applying for a payday loan isn’t too complex. Lenders have minimum requirements that you have to meet in order to get a loan. For most lenders, you have to be at least 18 and have proof of income. In cases where you get paid in cash or you’re self-employed, you’re unlikely to be approved for a payday loan. Lenders rely on steady and reliable income, which comes in the form of a bi-weekly or monthly paycheck from an employer. If you’re a self-employed person tying a few loose ends before a client pays, it’s a big risk for you and the lender. On your application, you want to be honest about your financial situation. Lenders tend to run a financial check on you and they will ask to see your proof of income. If it doesn’t match up, then your loan will be denied. Payday Advance Loans Can Help You Get Cash Fast What’s the final assessment of payday advance loans? It depends on your situation. They can be a big help when you’re in a pinch, but you have to make sure that you pay your loan back in full and on time. Payday advance loans are a good way to get cash quickly. Like any financial tool out there, you have to be responsible with it. Want to get yourself centered and back on track? Read this article about taking a break from social media and overload. CommentsComments are closed.
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