Payday loans refer to short term loans that are advanced based on a post dated personal check from the borrower which is held by the lender or on access to the borrower’s bank electronically by the lending party. The borrowers write and sign a personal check for the amount borrowed, together with other related costs and receive money. In some instances, the borrower is asked to sign over the electronic access of their bank accounts so as to receive and repay the instant cash loans.
How payday loans work
The instant cash loans are offered to someone with a reliable source of income and the lending period is normally a month. Although the borrower can visit the offices of the lender, online applications are also allowed. For those borrowers who meet the terms and conditions that are specified, the cash advanced is wired into their bank accounts within a day or two. The person borrowing the loan can arrange to pay the loan on a single instance or spread it over a period of time.
Requirements for the loan
To apply for a payday loan, you need to fulfill the following requirements.
- You must be above the age of 18.
- Be an American citizen.
- You should have a stable income
- You should have an active checking account.
- You must have a valid identification document such as passport or driver’s permit.
Use of the loan
There is no restriction regarding the use of the loan. Most people use it for whatever pleases them such as going out with family or friends, paying for repair expenses, paying utility bills and paying for emergencies among others. Lending companies perhaps don’t ask about what the money could be used for and if they do, then it’s a very rare occurrence. You have the freedom to use the loan for whatever you want.
There are many benefits which the instant cash loans offer. To start with, the application process is quite simple. There is no faxing of documents and you can borrow up to $1000 or even hire depending on your level of income. Nonetheless, you can apply for the loan online from the comfort of your office or home and arrange to present the lenders with any other documentation in case they are required. No credit checks required to apply for this type of loan.
Terms for the Instant cash loans
The amount that is advances ranges from $100-$1000. However, the exact amount which you can borrow depends on the maximum amount fixed by your state or by your inability to pay which is determined by looking at your statement of income. The loan’s interest rate is normally around 400% APR which makes instant cash loans the most expensive in the market. To borrow $100, the finance charge is anywhere between $15 and $30. Most borrowers pay off the loan in one installment, but there are those who arrange with the lending companies to spread it over a few weeks or months. The finance charges should be paid in whole.
What to consider
The first thing you should ask is whether you actually need the instant cash loans. It’s imperative to use this kind of loan when you are in a fix and in scenarios where you cannot access funds from any other source. In scenarios where the cost of the loan is exorbitant, it’s of paramount importance to exercise caution and prudence when borrowing short term loans. Also, you need to know if you really have the capability to repay the advances. If you already have other loans to service, there is a very slim possibility that you will have the ability to repay the loan. The lending company will never be bothered to ask if you really can afford to repay the loan, so you should exercise high level of discretion.
What to watch out for when applying for instant cash loans
These days, many Instant cash loans companies are coming up and it’s imperative that you review a company before you take a step forward and apply for a loan with them. Payday lending is an unregulated industry and you will definitely find many rogue players in it. These types of instant cash loans can put you in debt traps or vicious debt cycle, so you should put in place the right mechanisms to ensure that you aren’t a victim.