It goes without saying that everyone could use a little extra money in their day-to-day life, especially those who have found themselves living check to check. For these people, unexpected expenses that crop up between checks are a nightmare and have the potential to completely disrupt their lives. For these that find themselves in a time of need, there are places who will happily lend them funds until their next check.
These small loans go by the name of a payday loan, and are just what the name suggests: a loan until the next payday. Some stores will have them named as payday advances, to suggest an advance on the payday. Remember asking for an advance on your allowance as a child? This is similar to that. A payday loan, or payday advance, is an unsecured loan for short-term lending. These types of loans are given out so that a borrower can cover their expenses in the now on the promise of paying the loaner back on the next payday.
Application for a Loan
Often applying for these loans is as simple as asking and providing a few pieces of information, but the requirements will of course differ by store. While the stores that offer these types of loans can found in many places, there has been a trend of payday loans now being offered online as well. The application process itself to get a payday loan is very likely to be a quick one, and uncomplicated for the borrower. Compared to other loans offered on the market, the requirements are jovial as in many places the only things a borrower needs to present are legal and proper identification, proof of steady income (typically just check stubs for the past two or three weeks), and an active checking account to deposit the loan into.
The process is very simple and can be considered safe for the applicant as all fees are stated upfront before money is loaned. There are no hidden charges applied after the fact, and no interest rate for the week or day the money is loaned out. There is simply a stated charge to be paid, often working in the formula of: Average income from the proof of income – the fee = the amount to be loaned. The payday loan process is a very simple one, and can be considered a safe method of cash for those who are sure they will be able to pay the loan back by the agreed date.
The only concern a one-time borrower has is the varying interest rates dependent on how much they need to borrow. Often a very low interest rate is posted on the door, often tied to those who only need to borrow $100 or less. For those that need to borrow higher, expect to be paying an exorbitant interest rate on your loan. Just know going into these stores that the interest rate posted on the front door is very likely not going to be the one you pay.