The lowdown on payday loans
Here is a simple lowdown on payday loans for the uninitiated. Payday loans are short-term loans for employed people. This helps employed people to tide over difficult situations where they need money immediately and cannot wait till their salary is due. These loans are very convenient and handy, but have one small problem — a high interest rate. Interests on payday loans have been known to cross the 500% mark!
The good thing about payday loans is that you don’t have to wait for a credit check by the company. A payday lender doesn’t need to know your credit history and they will not bother to ask you for it. While payday loan companies differ in the information that is required, most of them ask for the following information when you apply for a loan: Proof of employment, proof of a checking account, last bank statement, social security and driver’s license numbers, and proof of residency.
To apply for a payday loan, you only have to give your lender a personal check for the amount borrowed plus a fee. Payday lenders allow consumers to write a personal check for immediate cash as long as they have a job and a checking account. The lender agrees to hold the customer’s check until his or her next payday.
And how do you get the amount? Once the company approves your payday loan, the money is deposited into your account. This is done pretty quickly, usually by the next business day. If you cannot repay your payday loans on the date specified, you can extend the loan period. You will only have to pay an additional fee.
You can change your mind about a payday loan without incurring any cost as long as it’s no later than the end of the next business day. You must tell the lender and return the cash. The lender must return any fees charged.