If you are looking for the best Payday loans, you probably need the money fast to sort out some emergencies. Unexpected expenses and other unfortunate situations are among the issues that might require you to get quick money in order to handle them. Under these circumstances, payday loans will come in handy to save the situation.
In most cases, payday loans allow you to access money shortly after application, often the same day or the following day. A payday loan can also be used to cover unexpected emergencies, bills, or living expenses that pop up when you are unable to cover everything around you.
What is a Payday Loan?
A payday loan is a short term loan that individuals take to cover unexpected expenses. The difference from the other common loans is that they are given within a short time after application. It could be on the day of the application or the next day. The downside is that they attract exceedingly high interest rates and maintenance fees.
Since the payday loan is given as a loan on a prospect paycheck, most payday loan lenders are obligated to write a predated check. Moreover, you will need to provide your bank details for direct deposit as well as to cater for the loan on the due date.
The main problem with a payday loan is that it can be too costly for most people. Its predatory nature often signals the beginning of a long cycle of debt that ends up being too hard to shake off.
Common Features of a Payday Loan
- The small payday loans are offered in a small amount, with most lenders capping them at $500. Some direct lenders may limit theirs above or below this limit range.
- The loan is repaid in a single reimbursement on the loanee's following payday, or whenever salary or wage is received from a different source like a pension. The loan's due date is usually 2 to 4 weeks from when the loan is given, but the due date is set during the signing of the loan agreement.
- The ability to refund your loan is not considered by the payday lender.
- The payday loan is given to you by either a direct deposit or checks, directly wired into your bank account or loaded onto your prepaid debit card.
What are the pros and cons of payday loans?
Pros of payday loans
- Easily accessed
The best payday loans are easy to access. Most lenders promise to approve and deliver cash in less than a day. Other lenders can be accessed 24/7 and have online applications that make them versatile and liked despite their predictable negative consequences.
Unlike the bank loans that take days to apply and get approved, top payday loan lenders approve the application in less than five minutes.
- Have fewer requirements
To access bank loans and other long term loans, you will often have to provide social security number, proof of income, credit check photo ID, and prove that you can repay the loan once given. However, payday loans require fewer requirements for application.
To apply for payday loans, you should;
- Be at least 18 years old
- Have a social security number
- Have a regular source of income
- Some may require an active bank account
- No background check on your credit
Traditional loan lenders require you to have a good credit record for approval. However, this is not the same with payday loans, as no credit checks are done on you. Since there is no credit check, there is no hard credit inquiry as well, which can significantly lower your credit score.
- Not secured
Payday loans are not like mortgage, a car title loan, or a bank loan that is secured by personal property. As such, the lender won't seize your property for failing to pay. However, they can have access to your bank account, which exposes you to risks such as lawsuits or sending you debt collectors in case you default.
Cons of payday loans
Payday loans attract high interest rates, which makes them very expensive in comparison to traditional loans. Although you could receive the direct deposit in less than a day, you should be ready to incur interest rates of up to 400%.
- Can easily trap you in debt
If you extend a payday loan, the lender automatically charges extra fees, thereby cumulating your out-of-pocket cost for taking the money.
- Won't help build your credit
Payday loans won't help in building your credit since they don't report to credit agencies.
What Do I Need to Get a Payday Loan Online?
The minimum requirements for borrowing online payday loans vary from one lender to another. These requirements also make the difference between the approval and rejection of your loan.
Most online payday loan lenders process loan applications online. It is imperative to note, however, that you need to meet all the requirements for approval and subsequent reimbursement of the loan. Since online transactions don't require paper documents or phone calls, loan lenders may also require you to provide them with extra information to check and confirm your financial status.
Before your loan application is approved, the online payday loan lender will check whether you are eligible for the loan. As such, they will ask for your personal identification, bills' statements, and wage or salary slips.
Other lenders will request for account aggregation. This will allow them to access your bank account to check and monitor your income and outgoings. This ensures they have detailed information about your affordability of the loan repayment.
Moreover, this allows the online payday lenders to track and monitor your daily financial situation and step in to help when you are experiencing difficulties with your finances. Alternatively, they can defer the collection of your repayments in case your salary or wages are paid late.
How to Get a Payday Loan with No Credit or Bad Credit
With no credit or bad credit, an emergency payday loan is not guaranteed. In most cases, short term loan lenders will do a credit check to establish the status of your credit score. If you have a bad credit or no credit at all, getting direct lenders to consider your application may be difficult. However, you still have some hope.
Having bad credit may affect your short term loan, but it doesn't mean that the application will be rejected. A bad credit shows how poorly you manage your finances. It also means that you will struggle to convince a direct lender to approve and award you a payday loan today.
For your emergency payday loan approval to be assured despite your bad credit or no credit score, you will need a guarantor. Getting a guarantor will enhance your chances of same day loan approval and receiving your direct deposit. This is because the loan you receive is guaranteed by someone else, thus minimizing the chances of defaulting. Note, however, that your guarantor must have a good credit score.
You may consider your family member or a trusted friend to act as your emergency payday loan guarantor. This means that when you fail or are unable to make loan repayments to your lender, the person who guaranteed the loan will have to step in to clear the amount due.
What is a Good APR for a Payday loan?
Top payday loans today may seem affordable on the face value, but the Annual Percentage Rate (APR) tells a different story. The APR is a measure of how much your payday loan is going to cost you in a year.
Most short-term loan lenders set the amount for payday loan fee from $10 to $30 for every $100 loaned. This means that weekend loans with a $15 per $100 fee have an APR of about 400%.
In contrast, the APRs on long term loans, such as credit cards, can be from 12% to 30%. As such, the APRs for payday loans and the maximum loan amount to be loaned on the same day are often capped in many states to protect the applicants. Regardless, a good APR for small payday loans should not be twice the amount loaned.
Can I get a Payday Loan without a Bank Account?
Are you looking for online payday loans but do not have a bank account? Well, it is possible to get same day loans even without a bank account. However, you might have to search more to find weekend loan lenders.
A bank account helps the lender to credit check you to know whether you will be able to repay the loan in the allowed time. To credit check and assess your bank account, the weekend payday lender will know your current financial status, determine whether you have bad credit or no credit, and more importantly, confirm that you can afford the loan you are applying for.
If you find a provider of top payday loans that is willing to loan you, then you must be ready to provide more information with supportive documentation for them to be convinced and feel safe to lend you their money. They have to make sure you are good at repaying your loans, even if you don't have a bank account.
Avoid rushing your application when seeking a payday now loan approval. Although your emergencies might push you into quickly applying for short term loans, taking your time during the application process will help you review all the terms and assess their implications. Otherwise, it will cost you once you start paying back the loan.