In the United States, approximately 12 million people take out payday loans each year, with the average loan term being two weeks. Payday loans are high-interest loans that are helpful for many people in a financial pinch.
If you’re looking for payday loans fast, you need to learn more about payday loans and the application process first. This way, you won’t jump into signing an agreement for a loan you can’t pay off in time.
Keep reading this guide to learn everything you need to know about payday loans and the application process.
The first step of the payday loan application process is understanding what a payday loan is and what fees you must pay.
Payday loans are short-term loans that give you access to fast cash. Payday loans usually involve high-interest rates and have short terms. Typically, you’ll have to pay off a payday loan with your next paycheck, which is generally within 30 days or less.
Payday loans are small loans, allowing you to borrow a total of $500 or less, but in some cases, you can borrow up to $1,000.
With payday loans, you’ll receive the loan in your bank account the same day or the next business day.
To repay the loan, you must authorize the lender to electronically debit the funds from your bank account on your next payday. However, you do have the option to repay the loan sooner if you’re able to.
Payday loans are often used as emergency loans for expenses that come up in the middle of the month before you get your paycheck. Many people use payday loans for situations like:
Whatever you use a payday loan for, you’ll need to ensure you have enough money to pay it back with your next paycheck.
First, many states regulate the interest rates and availability of payday loans. Some state laws say fees can range from $10 to $30 for every $100 you borrow. You’ll usually find payday loans charge $15 in interest for every $100 you borrow. This equates to an annual percentage rate (APR) of 400%.
Other states don’t allow payday lending or regulate rates differently. It’s best to check with your state attorney general for more information.
Additionally, there are several payday loan fees you need to be aware of. To begin, you must pay an application fee to process your application. This fee varies for each lender, so it’s best to shop around to compare these fees.
Origination fees cover the servicing and setting up of the loan. You’ll also have to deal with late payment fees and nonpayment fees if you fail to make the payments on your loan. Your loan agreement should explain these fees.
Keep in mind the most considerable risk of payday loans is not being able to pay them off by the due date. When this occurs, you’ll need to extend the loan. You’ll have to pay more fees each time you need to extend the loan.
These fees can add up quickly if you can’t pay the balance. If you’re not careful, they can worsen your financial state in the long run. So, you must pay the loan before the due date to avoid any issues.
There are different things to consider before taking out a payday loan. Despite the high-interest fees, they do have benefits.
One of the most significant benefits of payday loans is that you don’t need a good credit score. When you have a poor credit history, you’ll struggle to qualify for any type of personal loan from your bank. You may even have trouble qualifying for instant, short-term loans online.
This is because other types of short-term loans have much stricter credit requirements and use your credit score to determine if you qualify. Since payday loans are so short-term, they usually don’t consider your credit score.
Another benefit is that you won’t need to worry about payday loan payments long-term. Other personal loans can include payments that last for up to 72 months.
You’ll also know precisely what to expect with payday loans regarding your payment and fees. This makes payday loans a good option if you need a loan quickly for one expense.
Most payday loans are instant loans, allowing you to get cash immediately. They also have easy online applications to fill out, allowing for loan approval within minutes.
This is very helpful if you’re faced with a vet bill or emergency home repairs you have to pay by the end of the day.
Payday loans can save you money, especially if you have a problem with an overdrawn bank account. Depending on your bank, overdraft fees are typically around $35 or more. You can also be charged these fees multiple times daily until you bring your bank account balance out of the negative.
Additionally, you can receive insufficient fund fees if your account has a negative balance for multiple days.
Short-term loans often have prepayment penalties, which are fees lenders charge if you pay the loan off before the term officially ends. This is due to lenders counting on making money from your loan’s interest rates.
Although prepayment penalties are usually associated with mortgage loans, many short-term loans also have them.
Payday loans don’t have prepayment penalties, allowing you to pay off the loan at any time before the due date.
Now that you understand more about payday loans, you can start the application process. Although you may be in a situation where you need money quickly, it’s best to take as much time as you can with this process.
The first thing you need to do is begin researching payday loan lenders. Remember, you want to find a reputable lender with the best interest rates. There are so many different lenders online, so you’ll want to make a list of the top 3 to 5 lenders you find.
Read Google reviews for each lender to get a good idea of how current and past customers found their loan experience. You should also visit each lender’s website to learn more about their services and how long they’ve been in business.
Be sure to check the Better Business Bureau (BBB) for reviews and ratings of each lender you’re considering.
You’ll need to gather your documents and ensure you meet the basic requirements to get a payday loan.
First, you must be at least 18 and have valid identification, like a driver’s license. You also need to have a checking account and proof of employment.
Once you have your documents, you can complete an online application from the lender you choose. Most applications only require simple information like name, address, and DOB. You can usually complete the application within 15 minutes.
After you complete the application, you’ll receive a loan offer from the lender. Once you accept this offer, you’ve agreed to the terms and will receive an immediate cash advance.
For this reason, you’ll need to understand the loan terms, fees, and interest rates before accepting the offer.
Although payday instant loans tend to have higher interest rates overall, you should still shop around for the best rate. Some lenders frequently offer lower interest rates for specific periods.
It’s essential to get a good understanding of these rates so you’re aware of exactly what you need to pay back. At first glance, it may seem like you’re getting a great deal, but you must understand how much interest you’ll pay.
It’s crucial you have a thorough understanding of the loan terms. Payday loan rules can be complex and vary for each lender.
Be aware of the total amount you need to pay back and what happens if you extend the loan terms. Since you must provide your bank account information, the lender can automatically deduct these fees. This could leave you short on cash for your other bills.
In addition, be sure to look at the cancellation policy. You should have at least two business days to cancel the contract without paying any penalties.
Remember, online loans have various fees, so be sure you understand the standard fees that come with a payday loan. Also, watch out for extra fees or penalties you can incur.
Now that you know more about payday loans, you’ll better be able to find a payday loan that works for you.
Are you looking to find payday loans fast? You can turn to FastLoanDirect for your payday loan needs. We can help you access various lenders and loan terms, giving you many loan options to consider.
Once you complete our online form, we’ll match you with payday loans for as low as $100. Our form is secure and easy to fill out. Once you connect with a lender, you’ll be able to get the funds you need by the next business day.
Be sure to visit us online today to start the process and find the best payday loan for you!