Have you been in a situation when you needed instant cash? If all your family and friends are unavailable to lend a helping hand, it can be a very stressful feeling. There if one solution, which can give you some relief, i.e. a payday loan. Payday loan is a short-term cash loan, it comes at a high interest rate. They are perfect for those times when you need some extra cash in an emergency and there are a few days before your pay day.
Payday loans range from $100 to $1000 depending on the state legislations. The average term of the loan is about two weeks. The loans come at a high interest rate and typically cost 400% interest rate (annual). A loan of about $100 would have finance charges from $15 to $30.
Features of a payday loan
Before you consider opting for a payday loans, it is essential that you understand its features:
- These loans are for a small amount and many states set a limit on the size of the loan. $500 is a common limit, however you will see loan limits above and below $500 too.
- A payday loan will usually need to be paid in a single shot on the date when you get the next pay check. The due date is usually two to four weeks from the date of borrowing and the exact due date is mentioned in the loan agreement.
- You will have to write a post-dated check for the full amount, including the interest and fees or enable to lender to electronically debit the amount from your account.
- The loan is usually provided in cash, cheque or electronically transferred into your account or loaded on a prepaid card.
Advantages of a quick cash loan
Here are a few reasons that make payday loans a great solution, in case of a financial crisis:
- Convenience: It is easy to apply for these loans by filling a short application. You can also file the application online from the comfort of your home. Once the application is approved, the amount will be credited to you.
- Quick: These loans are fast and that makes them perfect for emergencies. The entire process takes less than 24 hours. This means you do not have to wait for long to get some cash in hand.
- No prepayment penalties: If you wish to repay the loan before the due date, do not worry, there are no penalties involved. This is an important advantage for those who wish to pay off the loan soon.
- Safe and secure: Payday loans are regulated by the government and that makes them a safe and secure way of borrowing money.
Requirements to avail a payday loan
All you need to be eligible for a payday loan is a bank account and a steady source of income. Apart from this you will need documents for identification and you are good to get a quick loan. The lender will not conduct an in-depth, full credit check but only check if you will be able to repay the loan with your pay check.