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Many seek flexible, efficient ways to access funds in today’s dynamic financial landscape. One recent method that caught my attention is payday loans issued
Payday Loans & Payday Loan Organizations Near You
What is a payday loan?
A payday loan is a short-term loan that can be given to you in your personal emergency, such as when you are unable to meet your financial obligations. To borrow against your future paychecks, a lender will require you to complete paperwork and provide proof of income.
In the U.S., payday loans have become an increasingly popular way for consumers to manage their short-term cash needs. More than 14 million Americans have taken out these loans in 2011 alone, with nearly $80 billion being lent on an annual basis. However, in recent years the popularity of these loans has dramatically declined due to tightened regulations governing the industry and high default rates arising from consumers’ inability to repay their debts on time.
While payday loans appear to have been a viable solution for those in need of cash, it is important to note that these loans are an expensive option. On average, these cash advances typically cost twice as much as a credit card advance. And because they typically require a substantial down payment, the average borrower must borrow at least $300 to obtain enough capital to make a payment.
How Do Payday Loans Work?
If you are approved for a payday loan and decide to take out a loan, you will generally have to make a small down payment (up to 10 percent) and agree to pay back the money within 14 days. Payday lenders typically require that you borrow funds in three installments (two being due at your next paycheck) for a total of 12 months or less, but there are some instances where borrowers can receive their funds immediately.
If you choose not to repay your loan the full amount, you will be charged an additional fee. The most common fees include failing on renewal because your payment was less than expected, being charged interest on an outstanding balance, and overdrawing your bank account.
Is Payday Loan Safe and Secure?
While payday loans can be a useful way to get temporary cash, you should be careful when considering this financial product. If you are unable to make the required repayments, and there are no caps on the amount of interest you will pay, you and your family could find yourself in a very difficult situation. There have been cases where borrowers have been charged an exorbitant monthly rate that can exceed 1,000 percent per year. As money is borrowed against future paychecks, a potential borrower might not notice that they have been drawn deeper into debt until they receive a bill late in their pay cycle demanding several hundred dollars.
Find Payday Loan Companies Near You
Payday Loan Types
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How Much Can I Borrow With Payday Loans?
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A payday loan is a very popular way for people who work paycheck to paycheck to obtain a small amount of money for unexpected
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There are so many moments when getting a little extra cash in the pocket or bank account can get you by, particularly if you
Frequently Asked Questions
How much can I borrow?
The size of the loan varies by state. Usually, it can be up to $2500. For example, in Alabama, borrowers can take only $350. Usually, $600-700 are common sizes.
Can spouses have separate loans?
Yes. One person has their own payroll and will have to pay the loan on time. Spouses can also have their own accounts and take payday loans from each account.
Do I need to be employed? Can I be retired?
As long as you have a source of income, you can be retired to apply for a payday loan. Because the loan is a short-term one, so that does not matter.
Do I need collateral to apply for a payday loan?
Yes, collateral is a must for you to apply for a payday loan. Because if the lender feels that there is not much risk for them to approve you, then they would likely decline your loan application.
Is there any cost to applying for the loan?
No, applying for a payday loan is free and does not involve any cost. But if you accept the loan and get it approved, you need to pay the lender fees or interest.
How will I know if I am approved? When will I receive my funds?
It depends on the lender. Some lenders will give you an instant decision, so you can get your cash right away. Others will take longer, usually a few hours or even a day or two.
Will I need a fax machine to apply for a loan?
No, you do not need a fax machine to apply for the payday loan. You can complete the application if you have a computer or mobile phone and internet access. So it does not matter if you have a fax machine or not.
When will the loan be due?
As the payday loan is short-term in nature, it has a deadline. This is the date when you will need to pay back the loan. The payday loan is supposed to help you with emergency situations so that you can use it as soon as possible. You must pay back your loan on time to avoid missing a payment. This will result in late payment fees and hurt your credit score. If you cannot pay back the loan on time, you will also need to pay a fee. Some lenders charge more than $25 just for that.
How and when can I pay back?
You can pay back your payday loan online or at the lender’s office. You can use the lender’s website to make your payment if you have internet access. Otherwise, you can make a payment at the lender’s office in person or by phone. It is not recommended to go and give money in cash since there will be no proof of the transaction.
How does that affect my finance charges if I pay off my loan early?
If you pay off your payday loan early, then the lender will refund part of the finance charges. The lender has to calculate when is the next time the due date comes around. That’s when they will subtract the interest you have already paid from your loan. After that, they will apply any late fee if you are behind in payments.
What if I change my mind and decide to cancel my loan?
If you change your mind about the payday loan, it is better to notify the lender immediately. As long as you have given the lender more than two business days before the payment deadline, they will refund all the money they have charged you. The lender will get the funds from your bank account, and you do not need to return any money in person. That is a very good deal if you change your mind, so make sure to ask about it in advance.
Can I refinance my loan?
If you have an existing loan, then you are not allowed to refinance it again. Payday lenders do not allow their borrowers to refinance their loans because it means the lender loses out on the interest. In other words, if you refinance the loan, you will need to pay a lot more in the long term than if you just pay it off with the amount you initially borrowed. That’s why payday lenders are wary of borrowers refinancing their loans.
How many payday loans can I get?
Most payday lenders will not approve more than three loans in a 12-month period. While you are typically not required to disclose the reason why you need a loan when applying for a loan, some lenders may be able to tell if you have already received other payday loans.
You are allowed to have multiple payday loans, but it’s always advised to be aware of the dangers that can occur if you borrow beyond your means. When one loan becomes due, and there is not enough cash available to cover the new and old loan payments, your bank account will likely have insufficient cash flow.
Is a payday loan variable or fixed rate?
Most payday loans are variable rate loans, meaning that the APR can change at any time. The lender can change their rates for several reasons, such as when the Federal Reserve raises interest rates or your credit score changes.
On average, the annual percentage rate for a payday loan is about 400 percent. Fixed-rate loans typically have lower APRs, but they come with other drawbacks. For instance, you may have to pay higher fees and additional interest if you are unable to repay a fixed-rate loan by its due date.
What Happens If You Don't Pay Back a Payday Loan?
If you cannot pay back the money you borrowed and do not wish to renew the loan, your loan can be sold to a third-party debt collection agency. Some consumers have reported receiving harassing phone calls from their debt collectors demanding the return of their money. While some states have protections for consumer debt collectors, a large number of states do not.
The Consumer Financial Protection Bureau (CFPB) has recently introduced new rules that govern payday loans. These rules require lenders to verify that borrowers’ income is enough to service their credit and set limits on how many times they can attempt to debit repayment from borrowers’ bank accounts. However, there are still no minimum requirements governing the interest rate charged by payday loan lenders.
Advantages of Payday Loans
Payday loans have many benefits for both the borrower and the lender. For starters, these loans are convenient and easy to obtain. In most cases, all you need to provide is your Social Security number, proof of employment, and a checking account where payments can be automatically deducted.
These loans also serve as an alternative source of funding for consumers who have no access to a traditional bank account or credit card. The main advantage of such loans is that they can help individuals who need money fast due to unexpected emergencies or critical expenses (health care, car repairs) that must be paid urgently.
Disadvantages of Payday Loans
Many believe that payday loans provide much-needed assistance during times when they may be financially unstable. While payday loans are a source of funding for consumers who have no other option, they are not the best option.
On average, Americans spend more than $400 per year on interest fees and loan fees. And because these products often require high upfront fees, the borrower’s net costs can amount to more than 500 percent of their initial loan.
As alluded to earlier, many borrowers have difficulty repaying their debt on time due to the high cost of these loans. As a result, they will be charged with additional fees and find themselves in a vicious cycle that can ultimately lead to default or bankruptcy.
What Do I Need to Apply for a Payday Loan?
- Driver’s license for identification.
- A checking account
- Some recent utility bills.
That’s pretty much it. To apply online, you can enter some personal information into the application. After that, you may review the terms of the loan, approve them, and fill in some fields there. In a few minutes or so, you will receive an e-mail confirmation that your loan has been approved or denied with a link to take the next steps (or sometimes they give you the lender’s phone number to call).
How to Get a Payday Loan?
Online payday loan applications are pretty straightforward and simple. You can start filling in some information about yourself (such as name, address, e-mail, phone number, employment details, and many others) and then select your loan amount. Check with interest rate and fees if they charge for any processing of the application.
Complete all required fields, such as the checking account number, which will be attached to your application. After you’ve done that, select how soon you need your money and the term of the loan. The term is usually from 2 to 30 days (or even more). And there are these things called “rolling over” on payday loans where a lender charges additional fees every day that you roll over your loan till you take it back. Yes, some lenders may offer longer terms, but even that might be problematic sometimes.
What Do I Need For a Payday Loan?
- You need to be employed and have a source of income. If you are self-employed then you need to have a business account and a tax number to apply for the loan.
- For anyone who is under 18, you need to get permission from your parents or guardians first.
- You should be a US resident and you need to be a permanent resident of that country.
The Bottom Line
A payday loan is a short-term loan that can be given to you in a personal emergency, such as when you cannot meet your financial obligations. While payday loans appear to have been a viable solution for those in need of cash, it is important to note that these loans are an expensive option.
On average, these cash advances typically cost twice as much as a credit card advance. Additionally, the borrower must typically borrow at least $300 and agree to repay the money within 14 days.
If you are considering taking out a payday loan, know what you’re getting yourself into and read all the fine print before signing on the dotted line.