Payday Loans

If you need a quick and easy short-term small loan, it might be worth your while to look into payday loans. A payday loan is a cash advance loan, which can give you much needed money before your payday wages get deposited into your bank account. Whilst payday loans can be incredibly useful for some borrowers, they may not suit everyone, and whether you decide to apply for a payday loan of not, you should be fully aware of their pluses and pitfalls.

Requirements

Different loan lenders will have slightly different requirements that you will need to fulfill to apply for a loan from them, but there are a few general provisions. Clearly, as you are applying for a payday loan, you'll have to have a job although the amount of time you have to have been working may vary between lenders. You'll need a working bank account, as the loan is usually transferred directly into your account, and many lenders ask that you have a permanent address. Being 18 years of age or older is another common request.

Get up to $600 in 60 minutes

Advantages of a Payday Loan

Speed – Once you've been approved for a payday loan, the money is usually in your bank account within 24 hours. This is extremely fast when compared to applying for a loan from a bank, for example.

Convenience – Many lenders grant payday loans over the Internet, so there's no need for faxing documents, let alone making an appointment to meet the loan lender face to face.

Can Be Bad Credit Friendly – Even if you have a bad credit history, it doesn't necessarily mean that you'll be denied a payday loan. Most lenders will look at your ability the repay the payday loan at the time that you apply for it, rather than focusing on any outstanding debts you may have and will decide whether or not to lend money to you based on that assessment.

Short Term – As mentioned earlier, payday loans are designed to be short term loans, like a cash advance, usually lasting for the maximum of a few weeks, whilst you wait for your next pay check to arrive. Therefore, provided you manage to repay the loan on the due date, you are in debt only temporarily and shouldn't find yourself borrowing money for very long.

Disadvantages of a Payday Loan

Expensive – Payday loans may be quick, convenient and all those other things, but they come at a cost and that cost is very high interest rates. Remember that if you borrow cash at $25 for each $100 loaned, and you borrow $600, you'll actually only be receiving $450. You need to assess whether it is actually worth your while paying so much money in interest to get the cash loan you want.

Must Repay Promptly – A payday loan is, by it's very nature, a short–term loan, which gives you a cash advance on your next wage slip and so must be repaid as soon as your next wages go into your bank account. If you find that you can't repay the loan, you need to contact the lending company quickly to work something out. Be aware that extending any existing loan will almost certainly cost you more charges on top of an already comparatively high interest rate. And of course, failing to repay the loan will only put you into debt.

Limited – If you need a large amount of money, then a payday loan probably isn't the right type of loan for you as it truly is a small loan. Usually, a payday loan will only give you access to $500 -$600.

No Multiple Loans – You can only get a cash loan through one payday loan at a time. However, you can obviously run consecutive loans from the same loan lending company, as long as you repay the loans each time they expire.

If you need cash in a hurry, have a reliable job and are pretty confident you can repay the loan in full come next pay day, then a payday loan may be a solution to your financial problems. However, as with all things borrowing and lending related, please be sure you read all the small print carefully and ensure that you know exactly what you are agreeing to before you sign any papers.