Your Guide to Using a Direct Lender Payday Loan

According to some research, 56% of Americans don’t have enough emergency funds for $1,000. 

If you also find yourself in this situation, then you may want to consider getting a direct lender payday loan.

There are many payday loan options out there, but we’re here to help you learn more about these types of loans and how to make the best decision for your finances. 

What Is a Payday Loan?

A payday loan is a short-term loan where the lender will give you a line of credit with high interest. The amount will normally be based on your income, and the principal would be part of your next paycheck. 

So in a way, it’s like you are getting paid earlier, but you’ll have to pay interest for it. There are short-term loans, and some people also refer to them as cash advance loans. 

How Does a Payday Lender Loan Work?

A payday lender normally comes from a direct lender, like a company, bank, or institution. You’ll be working with them without a middleman or broker. 

A broker would normally charge additional fees for their services, but a direct lender should offer the loan without any extra fees or charges. 

You can take a payday loan out for almost any reason, like buying a new car, improving your home, paying off debt, covering medical expenses, or an emergency fund. 

If you apply for a loan through a direct lender, you’ll need to send them some personal information about yourself. This will include your social security number, income, credit score, employment status, and any other information. 

You’ll also need to select the amount of money that you want to borrow and also select the repayment length. When the lender has all of the information, they can make you an offer. You’ll then have the option to accept it or not. 

If you do, then the money will deposit into your bank account as soon as possible. 

Benefits of Working With Direct Lenders

There are many benefits of working with direct lenders rather than a broker for your payday loans. Direct lenders can normally get you a better interest rate than a broker would since they’re working directly with you and won’t have to worry about long application processes. 

The direct lender can approve the loan much quicker than a broker would, and as soon as you get approved, the money transfer can start, so that you can get your funds much more quickly. 

Direct lenders also know that most people who take out these loans are applying for emergency cash and most likely need it as soon as possible. Because of that, they streamline the application process to try and get you funds within a business day. 

Direct lenders also don’t use a middleman, which can help you avoid high rates and fees. Some of the lenders also offer more flexible solutions as well. For example, they might have short or long-term plans available for your loan repayments. 

Are There Any Risks?

There are a few risks with payday loans, but you can avoid them if you’re careful and choose the right lender. 

For example, payday loans have hidden fees and high-interest rates, and it could be challenging to pay them back. Because of this, you always need to read the fine print before you sign any contract. 

The fine print will list all of the fees and charges that come with your loan. 

What Are the Interest Rates for Payday Loans?

The one catch with payday loans is that the interest rates can be quite high. In fact, some of them have interest rates that can be as high as 800%. 

Most states have limits on how high interest can be for loans, and this range typically is between 5 and 30%. However, payday loans fall under different rules, which is why they can charge such a high-interest rate. Because of this, some states have outlawed payday loans altogether, so make sure that you check what state you’re in before you apply for one. 

According to the Truth in Lending Act, lenders still need to tell you about their finance charges. This way, you’ll learn about the total cost of the loan. 

How to Get a Payday Loan

If this sounds like the right loan for you, you’ll need to learn how to get one of these loans. You’ll have to find a small lender, as bigger banks normally don’t deal with payday loans. 

You’ll need to submit an application with some of your pay stubs as well. Keep in mind that submitting an application likely means that they will pull a hard credit check as well. These hard credit checks can hurt your credit score if you do too many of them in a short amount of time.

Because of this, you should select which lenders you want to submit an application to. However, many lenders may not ask for a credit check either, so you should ask about that before you submit an application. If you have bad credit, try finding a lender that doesn’t pull your credit score.

Discover More About Using a Direct Lender Payday Loan

These are only a few things to know about using a direct lender payday loan, but you’ll need to find the right lender.

Thankfully, we can help you out and match you with the right lender for your needs.

Check out our website to find the right lender and get money in your bank account as soon as possible.