I am sure that you have heard all those commercials about getting payday loans to cover unexpected expenses. You see the commercials, you hear all of the hype about them. The truth is they can be a very good thing, but you need to do some homework of your own beforehand. There are state laws that govern the payday loan industry and they vary from state to state. In fact, only 37 states are licensed to make these type of loans. A credit check is not required to receive a payday loan. So even those with negative credit can qualify.
Remember, the fees associated with a payday loan can be quite high. Especially if you do not repay the loan in a timely manner.
Here are some tips for you:
* Know the laws in your state: You can find this information online fairly easily.
* Be prepared: You cannot get a payday loan without a valid bank account. Some lenders prefer an account that is at least 6 months old. You will need your bank name, account number and routing number.
* You will need proof of income: The lender will need your employers name, address and phone number. You may be asked to fax paycheck stubs as well.
* Decide before you apply how much you need to borrow and can comfortably repay. You may be offered more than you ask for - think about it carefully!
Having this information ready will make the application process go much smoother.
Frequently Asked Questions (FAQ's)
What are the requirements for a payday loan?
* You must be at least 18 years of age and a U.S. Citizen
* You must have a job (or other source of steady income, i.e. pension, social security, etc.)
* You must have an active, open bank account
* You must make at least $1,000 NET income per month (after tax)
* Other requirements may apply depending on the individual lender.
What if I only have a savings account and not a checking account?
Several lenders in the network can qualify you for a loan even if you only have a savings account. Please contact your bank to get the routing number if you do not already know it. This is needed in order to electronically transfer the loan to your savings account. You must have a bank account in order to qualify for a payday loan because your money is usually deposited directly into your account and the payment will be withdrawn on a predetermined day.
What if I do not have a driver's license or State ID?
If you do not have a driver's license or State issued ID you may enter your social security number.
What if I have a fixed income such as Social Security or Retirement Pension?
As long as you have a steady stream of income monthly, lenders may be able to provide you with a loan. Enter your benefit provider as your Employer or simply write "Retired". If you do not have the telephone number of your benefit provider, then you may enter your own telephone number. Enter the number of months you have been receiving benefits for the "Months Employed" field.
How long do I have to pay back the payday loan?
Your payday loan is normally due on your next pay date; however, most lenders will allow you to extend your loan by paying a fee. Due dates will be set when loans are approved.
You typically have the following options:
* Do nothing, loan will auto-refinance on a schedule set up by the lender and you
* Pay the loan off in full on your next pay day
* Renew the loan and pay the interest payment and fees only
* Renew the loan and pay interest as well as part of the principal
Here are a few suggestions to improve your chances when you apply:
* Time of Day: Most lenders accept applications outside of normal business hours. Online is available 24 hors a day. However, to verify bank accounts, employment, etc. you may want to apply during regular business hours Monday through Friday, 8 a.m. to 5 p.m. EST.
* Direct Deposit: Many lenders favor customers whose paycheck is directly deposited into their bank account by their employers. If you do not have direct deposit, you can ask your employer to enroll you in their direct deposit program
* Outstanding Payday Loans: Many lenders will not issue payday loans if you have too many other loans outstanding. This information can be verified without a credit report.
* Always use valid and truthful information when filling out the application. Failure to do so will only delay or cause your application to be denied.
Remember, payday loans should be used wisely as fees can be costly and failure to repay them in a timely manner can negatively affect your credit.
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