THE PROCESS OF TAKING OUT A PAYDAY LOAN Featured

12 September 2018 625 Views

Sometimes people face urgent situations and need to cover a financial gap, so they turn to short-term loans. Unfortunately, short-term loans are risky and improper usage of them can lead to a dangerous case of a debt cycle. However, if they are used properly and responsibly, payday loans can help cover unexpected expenses.

If you don’t have emergency savings and if taking out a normal loan will take too much time, then maybe a payday loan is the correct, quick, and simple solution for you.

In this article, we will cover the typical process of taking out a payday loan.

Step 1. Figure Out How Much You Need to Bridge the Financial Gap

Before you start the process of obtaining a payday loan, figure out the exact amount of money you need. Short-term loans are unsecured loans (i.e. they don’t require collateral), which means that they carry high risks for lenders and thus high interest rates for borrowers. And the more money you borrow, the higher the interest rate will be. On the upside, since the review process doesn’t require collateral, it won’t be thoughtfully reviewed, lenders won’t check your credit score, and the decision will be made within 24 hours and the money deposited in your checking account quickly.

But let’s get back to the amount. Normally, it should be small enough so that you can pay it back with interest after you get your next paycheck.

Normally, people ask for $300 or less.

If you need more than $1,000, you’ll have to consider other financial instruments or sources.

In some states, the maximum permitted amount for short-term loans is $300. In other states, the maximum is $500. In a few states, the maximum is greater than $500. And in some states, it’s completely illegal to take out a short-term loan.

So, the next step is…

Step 2. Check your State’s Laws and Regulations

Each state has its own laws on payday loans.

Specialists on short-term loans divide the states into 3 groups:

-      States which don’t allow short-term loans

-      States with heavily regulated short-term loans

-      States with less heavily regulated or unregulated payday loans

So if your state bans payday loans, that’s unfortunate. But if they don’t…

Step 3. Find a Trusted Financial Organization

There are many companies and organizations in the market. You can find a local money-shop or you can use an online lender or in some cases, like ours, there is a network of lenders behind the site.

Read reviews, call, email, etc. You must be sure that the people on another side of the deal really understand your personal risks and are going to help you set up a realistic plan to get through this process.

Finally, you should trust their infrastructure, because that’s the place where your confidential information will be processed and perhaps stored.

Once you’ve selected a lender, you’ll be able to take the next step.

Step 4. Apply for a Payday Loan

Sometimes you have to deal with paper forms, but usually there is an online form you can fill out in less than 10 minutes. This is perhaps the most important step of the process, so make sure you have the following information ready:

-      Confirmation that you are a U.S. citizen

-      Confirmation that you are at least 18 years old

-      Your residency

-      Your employer information

-      Your checking account information

-      Your Social Security Number

-      Information about your salary and the date of your next paycheck

-      Your contact information: cell phone number, e-mail address

After you complete and send the application form, a confirmation email will be sent to your e-mail address and the review process will begin. On average, the review process takes about 24 hours. If the application is approved, the lender writes a check or deposits the requested amount in your checking account.

At this moment, you may feel relief from your financial stresses, but the process is not yet over.

Step 5. The Last Step: Paying It Back

This is perhaps the most important step. Any mistake with repayment can lead to a mess of financial problems. So stick to the repayment schedule. Pay in a timely manner and in full.

If you’re ready, apply to our network of lenders now!

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