If you’re thinking about getting a personal loan, but don’t think you qualify for financing, a payday loan is the next best thing. Payday loans are short term loans that work like traditional financing. You submit an application, provide the necessary documentation and wait for an approval. But unlike traditional financing, it’s easier to obtain a payday loan because there is no credit check or collateral required.
Payday loans are helpful in an emergency and you can use the money for any purpose. A steady job and bank account are the main requirements. If approved for a loan, the loan company deposits the money in your bank account within one business day. Typical loans are due on your next payday – or within two weeks. While payday loans offer a quick solution to cash flow problems, they can be costly. Here are a few tips to help you benefit the most from a payday loan.
Tip #1: Compare Different Payday Loan Companies
There are no set fees in the payday loan world. While many state governments cap payday loan interest rates, each loan company establishes its own finance charges and late fees. One company might charge borrowers $15 per every $100, whereas another company might charge $19 per every $100. You can avoid expensive fees by taking the time to research different loan companies. Call a local loan company to inquire about fees or compare different online companies.
Tip #2: Borrow Only What You Need
Obtaining quick cash is easy with a payday loan. Loan companies immediately process applications and send a response within a couple of hours. There’s a cap to how much you can borrow, and some borrowers mistakenly apply for more than they need. The amount borrowed determines the interest rate on a payday loan. The more you borrow, the more you owe in two weeks. You can keep your finance charges to a minimum by only taking what you need.
Tip #3: Know Your Due Date
The typical payday loan is due within two weeks, although some loan companies offer 30-day payday loans. Whichever term you choose, make sure that you know your due date. You can find this date in your loan documentation, but it helps to confirm this date with a representative. Payday loan companies do not write or accept checks. The entire process is completed electronically, and on your due date, the loan company automatically withdraws the money from your bank account. If the funds aren’t in your account, you will get hit with additional finance charges and a late fee, plus bank fees.