A payday loan is a small, short duration loan that is also called a payday advance. In this type of loan the approval and repayment of the loan is related to the payday of a borrower.  The individuals who will most likely use payday loans are:

• Young People: More than half of the users of payday loans are aged between 25-44 years. Some are in their twenties and some in their thirties. People who are aged more than 60 years are unlikely to avail payday loans.
• Low Source Of Income: Most of the payday loan users come with incomes that are not more than $40,000. Individuals belonging to this group are likely to apply for payday loans compared to people who have incomes of $50000 or greater.
• Tenants: People who do not have their own homes and stay as tenants by paying rents are more likely to obtain payday loans.
• Disabled: Borrowers are seen to take payday loans against their disability benefits. Disabled people are seen to use it at a much higher rate.

Why Should You Take A Payday Loan?

If you are wondering whether payday loans are good or not, here are some of the reasons to consider.

• Sudden Need: Any unanticipated expense is a part of a person’s life. If there is a need to fulfil some essential expenses and you also cannot wait, then it becomes difficult to make arrangements for any quick fund. Bank loans are difficult to avail and you will also end up paying interests for some months or even years.
• Instant Approved Cash: Once a borrower provides the necessary details, a payday loan gets approved instantly. Most lenders offer a simple and fast process. So you do require to fill up long forms in order to obtain a loan in comparison to other kinds of loans. Thus you can completely rely on a payday loan if you need quick cash for handling any emergency or anything else that appear.
• Easy And Clear Solution: Online loans are there to meet up unexpected requirements when the need is immediate. Payday loans come with no hidden fees, charges or complications. The approved loan amount is transferred to a borrower’s account within 10 minutes to 1 hour.
• Short Term Requirement: Payday loans are short duration loans that are best suited for critical situations. It is not possible to extend a payday loan for months or even years. The minimum and maximum limit is set accordingly so that an individual can repay it at once without any difficulty.
• Appropriate: The entire procedure of applying for a payday loan is conducted online. So there is no requirement of making any appointment with the lender or contacting them nay times for processing the loan. Once the application is sent online along with all the necessary details, you just need to sit back and wait for the approved loan amount to arrive in your bank account. There is also no restriction on what you spend the cash for.
• Simple Application Procedure: It is very simple to apply for these payday loans online than for any other secured loans from the banks. There is no such documentation that needs to be completed or forms to be filled up. Everything is quickened to make sure that there is instant disbursal of the approved amount.
• Few Requirements: There are very less requirements for payday loan application. So you will easily obtain it. You will require a fixed income source. No collateral is needed. You need to be aged more than 18 years to be eligible to apply for payday loan. There is no credit check done. Thus an individual will never need a high or good credit score. Obtaining a payday loan is much easier comparatively than conventional loans.
• High Amount: If you are a new borrower of a payday loan, then there might be a limit on the amount of loan you are eligible to borrow. This limit will be depending on your income range. But after you pay off your first payday loan, your lender might increase the limit of the loan accordingly. So the more you pay off your payday loans in the scheduled time, the higher loan amount will get approved. There are some restrictions on the limits depending on different states but in most cases it is a lender’s decision.
• Credit Rating Improvement: If a person is having a bad credit rating or is eager to maintain a good credit score, then he must look out for a way to repay loans in the scheduled time and create a good repayment history. Get a payday loan and repay it on proper time to have a positive impact on the credit score. The more you will be paying back on time, the more the credit score will increase.

Payday loans have been the quickest, easiest as well as simplest way of obtaining instant money. It is a hassle free procedure to obtain a payday loan compared to others. But it is necessary to carry out a proper research before you get ready to obtain a payday loan.

Payday loans also named as cash advance or check advance loans are low balance and short duration loan. These loans are fast and easy and come with very less qualification that are necessary for eligibility. They serve the purpose of helping individuals avail some urgent cash till the next payday.

What Qualifications Are Necessary To Get A Payday Loan?

According to the Consumer Financial Protection Bureau if a borrower quickly shows that he meets all the requirements then the process of qualification as well as loan application will be as quick as 10 minutes. In most cases while taking a payday loan, a borrower writes up a check for amount of loan taken along with a fee for lending and then the lender holds it until a scheduled due date. When the loan is due, the borrower will repay it, let the lender cash the check that is post-dated or write another check that is also post-dated for covering the loan amount. You should try to repay it at the scheduled date in order to avoid any financial trouble as each time you will extend the loan due date, more fees will be applied by your lender on the payday loan. The qualifying amount of the loan will be varied on the basis of the income of the borrower and the lender. But there are some laws that are established in some states regarding the maximum amount that can be availed from a payday loan. Some of the states also limit the borrower’s ability to have several outstanding loans thus preventing them to borrow large loan amounts at a high rate of interest. Depending on the state law loan amounts will vary from $50 to $1000.

A loan requirement is never the only consideration if you think of taking a payday loan. If you take into account the Annual Percentage Rate, it is never uncommon for these loans to go over 500% or 1000%. Business models as well as regulations do limit these loans’ size and term, but payday loans must be availed with lot of care. Some of the states are having laws that regulate the amount the lenders are able to lend and also charge for the payday loan they lend. Some states where payday loans are banned; there the lenders are often seen to get around these regulations by entering into partnership with some banks present in other states.

Lenders of payday loans never check the borrower’s credit score. If you are financially unstable and do not have a good credit score, then also you will be qualifying for a payday loan. Many people in UK use payday loans every year. Most of those individuals do not maintain a good credit score or have any access to savings account or credit card.

But just because your credit score is not checked, it does not imply that you will surely get the loan. You still need to meet all the other requirements for getting a payday loan. An individual who is going to avail a payday loan will see varied qualification depending on the payday lender that he will consider. But there are some universal standards that are very common. So generally you must be:

• Aged at least 18 years or the majority age from the state you are applying for the payday loan.
• A citizen of our country or permanent resident of our state.
• Able to provide with a proof of regular income.
• Holding a checking account.
• Having a valid email address along with phone number.
• A resident of any of the state where payday loans are legalized.

In order to be more specific, it is best to be ready with the following when you apply for a payday loan:

Personal Details:

1. Valid ID
2. Residential address
3. Valid contact number
4. Proper email address (it is needed if you apply for an online payday loan)

Income Details:

1. Frequency of pay cycle
2. Type of income
3. Name, address and contact number of employer
4. Net and gross amount of the income

Banking Account Details:

Payment options will be varying according to a lender and how you will apply for a loan. But at least you will require one of the following:

• According Checking account, routing as well as institution number or a debit form that is pre-authorized from your bank.
• Some payday loan locations can take a check that is post-dated.

Ensure that you are applying with a genuine lender by checking whether the lender has any kind of criteria for you to fulfill. Guaranteed loans are mostly a scam. You will always need to meet other requirements even if your credit score is not checked for getting a payday loan.

When you need cash, looking for a loan may be the best and the one alternative. But selecting the right type is necessary. So becoming aware of the precise nature of each loan type is an absolute necessity in case you’re contemplating even a short duration loan.

What Are Title Loans?

The main feature that defines a title loan is that it needs to be backed up by some type of collateral mostly by a vehicle title. The maximum loan amount depends on the percentage of the car value’s estimation. Title loans can be availed for any amount that is as less as $100. A borrower can settle the total debt at once or in several installments over a scheduled time. It depends on the loan amount and agreement with the lending company or lender. If you wish to qualify for a title loan, you must have a proper ownership of a car legally and there should not be any prior liability on that car title. A credit history is not relevant as this type of loan is backed by some tangible assets. In case of any default, the vehicle title can be transferred to the lending company. But most of the lenders wish to avoid such a scenario if they can and will mostly allow delayed repayment. This will let the borrower pay off only the interest for 1-2 months before he gets ready to repay the amount that is outstanding.

What Are Payday Loans?

Paydays loans when compared to title loans never need a type of property as collateral. This is because they are linked to a borrower’s regular source of income and paid off on the next payday. It is also used to take care of an urgent and temporary shortage of cash until you receive your next paycheck.  An individual can get a payday loan issued very fast irrespective of a credit score or any existing obligation. Thus they are very popular among individuals who are not able to secure credit for long duration or not willing to wait for any bank loan procedure to get completed. The borrower needs to provide the lender with his employment to receive the approved loan amount. It is done by showing his pay slip or the bank statement that demonstrates his regular monthly income. If the required conditions are fulfilled then the loan gets approved immediately on spot. The person who takes a payday loan needs to write a check for the entire loan amount along with the interest that is calculated for the duration of the planned debt for finalizing the deal and it must be postdated. The interest that is charged on a payday loan can be a bit higher till 400% annually.

Which One Is Better?

It is very difficult to classify any one as the better loan option. This is because both the loans have a tendency of taking an unpredictable financial situation and turn things worse. There is less risk of losing a personal property if it involves a payday loan. Title loans come with slightly less rate of interest and let a borrower avail a larger amount of loan.  Title loans are well secured by a material asset and payday loans are classified as unsecured ones. So lenders have less uncertainty with title loans.

Payday loans are hardly issued for longer duration more than 2 weeks and are always expected to be repaid completely at the scheduled term. Thus thy will never exceed the stated amount on the previous paycheck. But title loans have a chance of lasting for several weeks or months. Refinancing is also possible in some cases. So car title loans are larger and can be utilized for larger need of cash.

Every loan can get out of your hand if you are unable to take some precautions. Title and payday loans are not exceptions. It is easy to forget that the cash that is readily available is not yours and you are actually borrowing it against your future source of income.

If you are facing a sudden expense and having low funds, some better methods to get money is by selling those items that you do not need anymore, asking your company for an advance salary or making use of a credit card. Credit cards may have high rates of interest but their rates are less compared to what you repay for a title or payday loan. Most of the credit cards never charge an interest if you repay within a month.

So it is always recommended that you take a loan when it is completely necessary and there is not any solution that can be found. But even then the borrowed title or payday loan amount should never be greater than what is enough for solving your problem.

Payday loans are basically meant for people who are in need of quick money before their next payday. The main purpose of this type of loan is quick and easy money for taking care of life’s urgent and little emergencies.

Is It Easy To Get A Payday Loan?

It being a short duration loan has a high rate of interest. The amount of the loan that is borrowed ranges from $50-$500. You can get such payday loans from a lender or a company that at times offers some convenient financial service like license processing and foreign currency exchange. The process of getting a payday loan is very simple. It is mentioned as follows:

Find An Income Proof: A payday lender will require some income proof. So get hold of your pay slips or bank statements that show the amount that you have received for your employment.

Keep Handy Proper Personal Identification: When you apply for a payday loan, the lender will wish to have a look at your ID to check that you are a resident of the state from where you are applying the loan. So you must have an ID that is issued by the state like an identification card or a driver’s license.

Get Hold Of A Blank Check: Some lenders will not only require a proof to check that you hold bank account in your name, but will also ensure that you repay the loan on time by getting a blank check from you. If your loan is due, then he will cash your check. The check needs to be kept blank so that the necessary amount can be filled after you and the payday lender had a conversation and agreed on the fees that will be applicable on the loan.

Find Lenders: You can lookout for a payday lender online or in your phone book. These days most of the companies are seen to offer payday loans online. You need to submit the application of the payday loan online and then the money will get deposited in your bank account. You need to search online to check if payday loans are available in your state or not because all states do not allow payday lending.

Research Well About The Lender: Many scammers are present in this field. You need to investigate carefully to find out whether the lender is genuine or not before you apply for the loan. Perform an internet search to check out the reputation of the company. If you find many complaints that are lodged against any payday lender or you are not sure of lending money from anyone, then consider any other alternative.

Discuss About Fees And Rate Of Interest: You must ask the lender about everything that they will be charging, because they might make huge money by charging high interest and fees for several reasons. For example, a fee will be charged on a payday loan for applying for it. It is known as service fee. Some lenders may charge you a fee for withdrawing money from your bank account too.

Understand Everything: You need to understand each and everything clearly about your payday loan. A lender might hide some important information from you. Ask him well when the loan will be due and also get it in writing. As a borrower you will also prefer to get a payday loan from such a lender who will give you a lot of option to repay your loan. So always ask a payday lender whether you can repay the loan early, what happens if you do not have the amount to cover the repayment and also if they charge anything for doing these. Always ensure that you understand the amount they will be charging you if you extend your loan.

Complete The Application: Each of the payday lenders have their own application. But they will in general need information regarding your employer, annual earning, date of birth, phone number, address along with SCN or Social Security Number.

Receive The Money: The lender will deposit the approved loan amount in your bank account. He might also give you a check for it.

Repay On Time: A lender will hold your written check for the loan term for 2 weeks. As soon as the term is over, he will cash the check or debit your bank account. It will pay back the loan and lender’s fee too. But repayment on time will let you borrow another payday loan when required.

Extend Or Apply For A Rollover: If you are unable to afford for your check to get cashed by your lender, then you extend the loan term or apply for a rollover. It is usually for another 14 days. The lender will be applying another fee but you will not lose your chance for applying for another payday loan in future.

Before you take a payday loan, always carefully think about how you will repay it. Never borrow more than you are aware you will able to repay quickly.

A short term loan that is not more than few weeks is known as a payday loan. These loans can be availed from payday lenders who operate from storefronts or online. It is best for individuals who are in urgent need of cash.

How Do They Work?

Payday loans are so named as they are usually due on the borrowed person’s next payday. It helps people for a short time usually until their payday. The money that gets sanctioned from this loan is deposited directly into the borrower’s bank account. They repay the loan in full along with interests as well as charges by the end of the month. Although, a person can also borrow for a longer duration mostly 3 months and then repay the loan in regular installments. In general, a borrower will have time till the payday to repay the loan along with the interest. But there are some lenders that allow you to select the period of repayment for paying back your payday loan. They are not similar to the regular bank loans in many ways such as:

Small Amounts: In most of the states where payday loans are legally approved, there lies a limit on the amount you can borrow. This limit varies from $300-$1000. The most common borrowed amount is $500. According to the recent research report, $375 is the average size of a payday loan.

Short Period: A borrower is supposed to pay back a payday loan when he gets his next paycheck, i.e.: on his next payday. In most of the cases, it means that the period or duration of the payday loan is for 2 weeks. But it can also sometime cover a month.

No Installment: If you take a regular bank loan, then you get the option of paying it back in different installments. For example, if you take a $1000 loan from a bank for 1 year at an interest rate of 5% then you repay $85.61 every month. So you are paying $2.28 for the rate of interest and the remaining for the principal. But if you borrow a payday loan then you need to repay the entire amount that is the interest along with the principal all together at the same time.

Rate Of Interest: If you get a loan from a bank, then the interest that you pay actually depends on your credit score and also the type of loan you got. If a borrower has a wonderful credit score he has a chance of getting a mortgage loan with 3% or reduced APR or annual percentage rate. But if someone with a bad credit score takes an unsecured personal loan he would have to pay an APR of 25% or even more. In case of payday loans all borrowers are charged the same interest rate. It is usually $15 on every $100 that is borrowed. For example, if you take $500 you will repay $75 in the interest. It is not that bad, but remember that the loan period is for 2 weeks.

Credit Check Not Required: Banks always check a person’s credit score before they give out a loan in order to understand how much they might charge him. If a borrower has a really bad credit score, he will probably not be eligible to avail a loan. But to get a payday loan, you do not require a good or any credit at all. All you will require is an ID showing that you are aged at least 18 years, a proof of your income showing that you are employed and a bank account. You can get the approved loan in an hour or less and that is the main reason why payday loans are so much appealing to financially needy people.

Auto-Repayment: When an individual gets a payday loan, he hands over one signed check or other documents, that allows the lender to take out money from your bank account. So if a borrower does not repay the loan as it has been scheduled, the lender will either cash the check or withdraw the required amount from his account.

Simple Renewals: If you are sure that you will not be able to repay your loan on the scheduled time, you can renew it before it becomes due. You need to pay a fee that is equal to the interest that you owe and get another 2 weeks for yourself to repay the loan along with another payment for the interest. In some states where this is not valid, you can take a second loan immediately to cover all that you owe on your first loan. This

When there is an emergency and you have a bad credit score along with no savings, a payday loan will seem to be the best choice. But if you cannot afford to repay it on the scheduled time it will make your situation worse. So think wisely before selecting one.