How Payday Loans Work and What They Cost

Payday Loans, online payday loans

Do you have bad credit? Or are you in need of fast cash? Receive up to $1000 payday loans in a matter of hours upon request. With an application process that takes less than 5 minutes, whether you have good or bad credit, you will get instant approval. The best part about payday loans is the fact that they are usually settled upon your next payroll deposit, and if you are lucky enough, a lender may extend this time to 45 days from the time of your loan approval. It is, therefore, important that you get to know how payday loans work and how much it will cost to apply for one.

For people with regular sources of income, particularly to those with bad credit, payday loans offer fast cash. Although they are considered the most expensive borrowing option, these loans are typically small. The only significant challenge is that borrowers can end up paying more interest than the amount borrowed because each passing day before full repayment comes with a charging fee. These charges vary depending on the state in question.

Do You Qualify?

Some people call it cash advance, deferred presentment, deferred deposit, or credit access business. Apart from the names, it important to know how the loan works. But before we get to that, it is first important to know whether you qualify for the loan. To qualify, you must be at least 18 years, own an active bank account, possess an identification card, and have proof of income.

You Don’t Need Good Credit

As mentioned earlier, your credit history doesn’t have to be good for you to receive the loan. What the lenders confirm from the reporting agency is whether you have outstanding payday loans, wage garnishment, as well as a history of bad checks or bankruptcy. A lender simply confirms your income, including verifying your account information. Once this is done, the cash will be issued to you at a storefront in as little as 15 minutes or wired into your account within 24 hours.

When Is it Due?

The due date of the loan will be after your next payday, which is usually within a month. If you choose to receive the cash at a store, the lender will issue your next appointment where you will be expected to clear your dues. If you fail to show up, the lender will simply run the check to get what is rightfully his. For online payday loans options, an electronic withdrawal will be done when you fail to honor your word.

What about the Interest?

Depending on the state in which you wish to submit your payday application, the cost incurred is unique in each place. For the states allowing payday loans, the maximum interest lies between $10 and $30 per $100 borrowed. The loan from a store is $15 for every $100 borrowed. Online payday loan rates are higher compared to stores since they charge $23.53 for every $100.

Financial experts recommend that borrowers consider the amount of their next paycheck and determine responsibly how they are going to settle their dues. Although most lenders allow repurchases, including loan renewal, this should be ignored as it can result to a cycle of loans which will end up choking your financial freedom.

Featured photo by Rachel Titiriga / CC by

Posted on August 23, 2016