Fast PayDay Loans Basics
Research conducted by Combined Insurance for payday loans reveals that over half the population could survive financially for only seventeen days if they suffered an unexpected loss of income. Additionally, 64 percent of people run out of cash about five days before their next pay cheque. As a result, payday advance loans are an increasingly popular way to meet unanticipated expenses until the next pay cheque arrives.
The Basics About Payday Loans
Payday loans were started about a decade ago to meet the rising demand for unsecured, short term funds without a credit check. To qualify for a payday loan, the applicant must be an over the age of 18, be a resident of the US, have a bank account for at least two or so months and have a regular income of at least $750 to $1000 monthly. For borrowers with poor credit, no assets or no credit history, a payday loan is an easy way to get emergency funds. For this reason, payday loans are also referred to as emergency loans. Other names for a payday loan include payday advance loans , fast cash loan, cash advance loan, payday cash and short term loan.
Borrowers can usually take out a loan for anywhere from $50 to $2000, depending on their income. To get the loan, the borrower must complete an application and submit any necessary documentation. For faxless payday loans there is no documentation required but the borrower must have a bank account where their salary is directly deposited and the borrower's bank needs to have direct debit. The payday loan is due on the day their next pay cheque is issued and the money plus fees is withdrawn directly from the borrower's bank account. Sometimes the lender will require the borrower to sign a postdated check to assure the funds will be repaid. Borrowers will receive the proceeds of a payday loan within one and the cash can be used for any purpose.
If a borrower finds they are unable to repay the payday loans on the specified date, they can rollover the loan for an additional fee. The basic cost for taking a payday loan is anywhere from $50 to $100 or more for a loan with a term of one to four weeks and more time requires a significant fee in addition to this amount. The APR for a payday loan can work out to an Annual Percentage Rate (APR) of over 100 percent or more. A payday loan should be repaid as quickly as possible and is only meant to be used in emergency situations such as an emergency car repair or unanticipated medical expenses.
Payday Loans Definition and Terminology
Knowing the terms used when applying for payday loans makes the process easier to understand. The following is a list of words commonly used when applying for a payday advance:
- Accrue – interest that accumulates on a loan.
- Application – a series of questions presented by the lender that the borrower must accurately and fully complete to qualify for a loan.
- Applicant – individual or organization applying for a loan.
- Asset – an item of value owned by the borrower.
- Borrower – the person borrowing money from a lender.
- Credit – money owed that must be paid back.
- Credit Worthiness – debtor's ability to pay back money owed.
- Fee – cost to borrow money.
- Interest – percentage charged on the principal loaned and in addition to any other fees for borrowing money.
- Interest Rate – the percentage amount paid by the borrower for a loan.
- Liability – total amount owed to others.
- Lender – organization or individual that lends money to a consumer and usually charges interest and/or fees for the loan.
- Loan – money borrowed from an organization or individual that is usually repaid with interest and/or fees.
- Payment – a set amount including principal, interest and fees that is paid to a lender according to a specific time schedule.
- Repayment – paying off a loan.
For unforeseen circumstances that require extra cash immediately, payday loans is the perfect way to get the money needed.