There are so many moments when getting a little extra cash in the pocket or bank account can get you by, particularly if you have to wait a little while in between paydays. A credit card is probably the first way most people think of having a personal loan, although you do not need to reapply for funding once you pay off your line of credit since it renews. But unfortunately, not everyone can gain access to a credit card, and even for those that do, they may start out with a low line of credit at $200 or $300. Also, credit cards can get maxed out, and in some cases, you may be required to make payments by cash or check. But in cases such as those, you can still turn to other sources that include payday loans.
What Makes Payday Loans Different Than Other Personal Loans?
If you do not have the option of using a credit card to pay bills, your creditors won’t flex the deadlines, and your bank won’t approve a personal loan request, a payday loan is a good option if you understand it. Loans are always classified into two categories as secured loans and unsecured loans. Secured loans are where the lender needs to have collateral put up against it to protect them against borrower default, and unsecured loans are made without a guaranty that they will be repaid other than the borrower’s signature. Secured loans would include the following:
- Residential and commercial mortgages
- Auto loans
- Some business loans
- Pawn and jewelry loans
- Vehicle title loans
The following are unsecured loans:
- Credit cards
- Many debt consolidation loans
- Business lines of credit
- Payday loans
Most unsecured loans are a little harder to apply for because lenders usually want borrowers with good credit in addition to having a certain monthly income to minimize the chance of default. Payday loans approve a lot more people even if they don’t have good credit because these lenders understand that nobody is perfect and that damaging your credit should not disqualify you from ever taking out another loan. You do still need to have a steady enough income and usually verification of employment to receive a payday loan, but that’s usually the biggest factor in being approved. And unlike credit cards where you have to wait a week or so to receive them in the mail, or bank loans where you might have to wait days to receive the funds in your account, you can receive payday loans the same day even.
What Do You Have To Do To Borrow More With Payday Loans?
Most payday loans are small-dollar loans that range somewhere in between $200-$500. It is possible to get $1,000 payday loans, but those are dependent on the lender and what they have in their terms. The reason payday loans are given their name is because they are known to be very short-term loans usually intended to hold you over until your next payday. Sometimes they are referred to as payday advances, but that can be a little misleading because they are not the same as paycheck advances that some employers offer when employees need to take an early cut of the week’s pay. But for that reason, they usually won’t offer loans as high as $1,000 unless you earn that much within a pay period, though there are some exceptions.
There are some payday lenders that offer loans with longer terms that may give you a whole month or even longer to repay, and these lenders may allow you to borrow up to $1,000 if your monthly income totals somewhere in that amount. But this income doesn’t just have to be employment-based income. Perhaps you have a hobby or are part-time self-employed and have some income from that. If you receive any payments such as social security, alimony, or other benefits, those can be factored into the amount you can apply to borrow. Different payday lenders will have different stipulations on what they’ll accept to approve for $1,000 payday loans, and some simply just don’t offer payday loans that high. If you aren’t eligible for a regular payday loan of that amount, you may be eligible for an auto title loan for that amount if you own a vehicle.
What Should You Know About Online Payday Lenders?
Payday loans have been around in many states for a while and most businesses that run them have physical stores that they operate out of. But many of those lenders also offer their services online and can complete loans without ever needing the applicant to physically set foot in their store. Some payday lenders are exclusively online, and while applying for payday loans online can be fast and convenient, you have to be very careful because sometimes identity thieves can operate with false payday loan websites and gain access to your banking information. There are many ways to use to weed out the scammers, but one way to be sure you’re getting a legitimate payday lender is to check your state’s laws regarding payday loans.
First, you should check to see if payday loans are legal in your state. While a little more than half of the 50 states allow payday loans of some kind or another, many states do not. If they aren’t legal in your state, a legitimate online payday lender will not accept your loan request. Even if they are legal where you are, there will be written laws dictating what a payday lender can and cannot do as well as the borrower. You should check those before applying for a payday loan to make sure the lender is following them.
What Documents Do You Need To Complete A Payday Loan Application?
Depending on whether you are visiting a payday loan store, what you need to present to complete your application may vary. But in general, you should have personal government-issued photo identification on you as well as documents that can verify the following:
- You are 18 or older and a legal US resident
- You are regularly employed or have verifiable regular income
- You have a checking account that is fully functional
Usually completing an application that verifies all these criteria takes only minutes, and approval can be made in seconds. Before you sign anything releasing payday loans funds to you, just make sure you understand all payment terms and fees.