Payday loans are loans that are short term and they have very high-interest rates. A payday loan is also referred to as a payday advance or cash advance. The amount of the loan is based on the borrower’s income. The borrower will also have to prove his or her income by providing the lender with a paycheck stub. Payday loans are available both at brick n mortar locations and online. A payday is a form of an unsecured personal loan. Payday Loans also does not require any type of collateral.
How To Obtain A Payday Loan
Payday loan providers are just small credit merchants who have physical or online lending businesses. The payday lender will run the application and approve the borrower all on the same day usually within an hour. The first step of the process of obtaining a payday loan is to make a decision of whether you are going to apply online or at a brick-and-mortar location. The borrower will complete the loan application at the payday lending store or website. The application will be processed for the borrowers. The borrower will also have to present the lender with proof of income such as a pay stub and a bank statement that shows an active bank account as well. Payday lenders do not perform any type of credit check on borrowers. Borrowers who apply for a payday loan are almost instantly approved as long as they have a job and an active open checking account.
When it comes to the terms of repaying the loan the borrower can pay the loan in full on their next payday and then reloan or the borrower can repay the loan over a six month time period. When the borrower gets their loan they leave a postdated check or their debit card information as collateral. The borrower also gives permission to the lender to automatically take the payment from their bank account if they do not make the payment themselves on their due date. The lender also can add a bounced check fee to the loan if the check bounces when they deposit it for payment.
Reasons Why People Get A Payday Loan
There are many different types of people who take out payday loans and they come from all different walks of life. There was a study done that showed most individuals who take out cash advances are white women between the age of 25 to 44 years old. The study also showed that certain groups of people have increased odds of getting a payday loan. These groups are people who are separated or divorced, home renters, African Americans, people earning less than 40,000 dollars a year and individuals who do not have a college degree.