A payday loan is just what it sounds like it is. It is a loan against what you will earn in the next pay period, at which point the loan becomes due repaid. In times past, payday loans were called a cash advance loans and were transactions that you made with payroll within the company setting. Now, you go to a payday loan store and fill out a questionnaire with all of your personal information. The lender will verify all of your data and decide whether or not to lend you the requested amount. This kind of transaction should not be confused with getting money at a pawn shop. Pawnshops take collateral for their loans. Payday loan shops do not.
What is a payday loan direct lender?
A payday loan direct lender is a lender that transfers funds directly into your bank account. You deal directly with the lender as opposed to an intermediary loan broker (who collects fees for themselves) between you and the lender. Direct lending reduces the processing time and decreases the charge that the intermediary would otherwise receive.
What is required to get Payday Loans?
For all lenders, the items required are the same as traditional loans.
Driver’s license
Bank statement
Personal check – in-store only
Paystub
Social security number
Valid email account – only required online
It is effortless to provide these items, and most loans can be processed, approved, and money in your hand, or bank account within an hour.
What to avoid when taking out a payday loan?
Predatory lending is when a company allows you to take out more than you can repay due to the interest they charge on these loans. Federal intervention forbids any lending institution to charge more than 36% APR to any military member.
Long term installment lending can be drawn out for as long as three years and is still charging 400% APR. At this rate, a loan of ten thousand dollars will become sixteen thousand dollars by the time you get it paid off. A long term installment loan may still be the type of loan you need, be aware of the terms before you sign any contract.
Car title loans are the single loan that you do use collateral. This loan asks for your car title as collateral. The biggest downside to this loan is that they can come and tow your car off if you are unable to make a payment as scheduled.
Payday loans can be the answer to your problems, make sure you pick the one that is right for you.
