Personal Finance

The Ins And Outs Of Payday Loans

Life is harder when you are going through financial difficulty. The good news is that you have a place to turn to when you need money the most. A payday loan can help pay your bills when no else is willing to lend you money.

What Is A Payday Loan?

A payday loan is a short-term loan that you can use to pay your electric bill, a repair bill or anything else that needs to be paid right away. The loan amounts range from $100 all the way up to $1,500. In some cases, you may be able to borrow more depending on your credit history and history with the lender. Most payday loans are to be repaid within 15 or 30 days.

Who Is Eligible For A Payday Loan?

Anyone can apply for a payday loan. The only requirements are that you are 18 years old and are willing to supply your social security number. Borrowers may be eligible for a loan even if they are unemployed. If you do qualify for a loan while unemployed, your lender may require that you have a source of income such as unemployment benefits or social security disability payments. Online lenders will make a credit decision within minutes and send your money to a specified checking account within 24 hours.

Where Can You Get A Payday Loan?

Payday loans for people with bad credit can be obtained online or at a payday lending institution near you. While it is faster and easier to get a loan from an online lender, a physical lending location can give you cash or a check that can be cashed if you don’t have a checking account. Another advantage to getting an online loan is that you can apply for future loans faster because your information will be saved for you.

What Are The Rates And Fees Associated With A Payday Loan?

Payday loans do come with a higher rate of interest than other loan types. You can expect to pay an APR or at least 100 percent or more. If you are late on the loan, you can expect to pay up to 1 percent of the loan balance for each day that you are late. Borrowers who don’t want to risk paying late fees can flip their loan up to three times. After the third flip, many states require lenders to give you additional time to pay back your loan.

Do Payday Loans Impact My Credit History?

Payday loans are reflected on your credit report. This means that making timely payments on your loan can help you build your credit history. As your credit score improves, it may be possible to qualify for traditional loans in the future if you run into financial problems.

Payday loans are a legitimate source of credit for those who are in a financial jam. Whether you need to pay your car bill or just need a little bit of extra money to tide you over until your next paycheck, a payday loan can be useful for those who have nowhere else to turn.

*Image from Creative Commons

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