Understanding Payday Loans
Payday loans are generally loans from $300 to $1000. Each state has its unique guidelines and conditions determining the maximum fees, rates and loan amounts. Some states have totally banned Payday loans and made it illegal for any lender to advertise and or offer these loans.
Since a Payday loan is based on your next paycheck, the qualification guidelines are much simpler than a traditional loan. But since there are still certain risks associated with these loans, a lender may consider several factors such as credit, the line of work, outstanding payday loans, bad checks and wage garnishments that could potentially affect your ability to deliver your paycheck in a timely manner.
Apart from the qualification requirements, most lenders require the borrower to be 18 years old with an active bank account, a pay stub, proof of employment and a state or government issued ID.
Things to Consider
Payday loans are generally a costly method of acquiring financing. Thus, before committing to such a loan, make sure the expense for which you are securing financing is urgent. A payday loan should be one of the last options to consider. Credit cards often have special promotional rates which is a much more attractive alternative. A personal loan could also be considered as an option. Be sure to check the rate and the terms of the personal loan with the lender to make sure it’s the right choice for you. Regardless of what type of loan you are applying for, you have to negotiate with your lender.