Important Steps to Take Before Applying for a Payday Loan

There are a number of things that you will want to do prior to applying for a payday loan. By taking these measures you will increase your chances of everything going smoothly. You never want to assume that you are going to be approved no matter what. This article will help you get organized so that you won’t encounter problems at any point during this process. Getting a payday loan can be tremendously beneficial, but you have to prepare yourself.

Assess Your Financial Situation

You must first take a close and unflinching look at your own financial situation before trying to get a loan of any kind. This is necessary so you know whether or not borrowing money is actually a good idea. As tempting as it may be to get a loan, it might not be the best idea. You also have to know how much you need to borrow. Both of these things are a crucial component of getting a payday loan.

Know How it Works

Some people think they know how payday loans work, but you might be surprised. These loans are typically short term with a payback period of 2-4 weeks. The amount of money you can borrow depends on where you live. Some states limit you to $500 while others have no restrictions whatsoever. You will pay back the money you borrow all at once by the agreed upon date. Private lenders give out these loans, as opposed to established financial institutions like banks or credit unions.

Selecting a Lender

In order to get a payday loan you will have to first find the right lender to borrow from. Because there are so many of these online-based businesses, you’ll need to do some research. When you are looking into each lender, you should try to get all the information you can on them. A lot of this information should be available on the lender’s website.

You can also get some useful details from looking through reviews of various lenders. Find out what former customers of certain lenders have to say about them. This is one of the best ways to learn about what their lending practices are like.

Check Your Credit

You should make a point of checking your credit to see what sort of state it is in at the moment. Your credit score is always changing, but you want to see what your report is like overall. It is definitely possible to get your application approved despite a low score, but your report could put off certain lenders. It is essential that you know exactly what your credit report is like before you go forward with an application.

Take Care of Your Existing Debt

Make certain that all or at least most of your outstanding debt is paid off before trying to get a payday loan. This will help with improving your chances of getting approved. If you have a lot of current debt that you still need to take care of, your application might be turned down. Lenders are usually nervous about giving money to anyone who is carrying a lot of debt when they apply. This can be easier said than done for a lot of people, but it is still something to keep in mind.

Increase Your Income

The more money you make, the more you will be allowed to borrow. You should try to find ways to increase your income as much as possible before applying. The lender will only approve your application if you make enough to pay back what you owe within two weeks or so. You can try getting a part time job on the side, at least until you have paid off your debt.

Review the Loan Terms

Before you accept the terms of the loan offer you are given by a lender, you’ll need to look them over very carefully. This offer will clearly spell out how much you owe in total and when it must be paid back by. You will also find details for the various fees that you will be required to pay the lender. You should never accept any loan offer until you have thoroughly looked it over.

Borrowing any sum of money requires a certain amount of preparation. If you rush into getting a loan, there is a good chance you will end up with some serious regrets. The best way to increase your chances of everything going smoothly is to keep these things in mind. A payday loan can be very useful when you need funds for some important expense. Those who have to catch up on bills or pay for a crucial repair to their home will find this to be a very attractive option for many reasons.

10 Reasons a Payday Loan is Better Than a Bank Loan

While many people turn to banks when they need a loan, only a small percentage actually get approved. If you ever find yourself in need of money for any reason, you will definitely want to explore all of your options. Going through a bank for a loan is really not the best option in most cases. In this article we will lay out all the various benefits of payday loans so you know what they have to offer. You don’t want to make a borrowing decision until you get this information.

  1. You Will Get Your Money Faster

Banks can take days if not weeks to disperse funds to approved applicants. If you cannot afford to wait a long time because you have an important expense, a payday loan is the better option. The average payday loan pays out within 24 hours, so you can get your expense taken care of without any unnecessary delay.

  • You Can Get Approved Even with Bad Credit

Bad credit tends to be a major problem for people who apply for a loan through a bank. Most private lenders that give out payday loans won’t be nearly as critical. You can have very bad credit or no credit history at all and still get approved. In fact, this is one of the biggest reasons why payday loans have become as popular as they are today. If you keep getting denied by your bank for a loan due to bad credit, you’ll want to explore this option.

  • You Can Borrow Different Amounts

Payday loans allow you to borrow anywhere from $50 to over $500. Bank loans are typically for $1,000 or more, which can be quite limiting. Those who don’t need to borrow a lot of money will find that this is a great solution. Make sure that you find out what limits if any your state sets on borrowing amounts for payday loans.

  • You’ll Pay Less Interest

Not everyone who gets a payday loan spends less on interest than with a bank loan, but the short terms help you save money. The shorter your loan’s payback period is, the less interest you will end up paying. Long bank loan terms mean paying more over the course of the loan, which is the last thing you want.

  • Superior Customer Service

A lot of banks are notorious for their abysmal customer service, but private lenders tend to really take care of their borrowers. This obviously depends on the lending company you choose, but many of them offer great customer support. You will typically have a phone number and email you can use to contact a representative. Some of these private lending companies even have a live chat feature on their website that is available 24/7.

  • It is More Convenient

The process of obtaining a payday loan is far more convenient and expedient than a bank loan. You will be able to apply right on the lender’s website, and it only takes around 15 minutes or so. This will save you a lot of time, which is always a good thing. Bank loans sometimes require you to fill out paper applications in person. This can be a very tedious and time consuming process to say the least.

  • No Questions Asked

Unlike bank loans, private lenders that give out payday loans won’t ask you what you want to use the money for. You won’t be limited with regards to how you spend the funds, which can make it a lot easier to get approved.

  • No Collateral Needed

Payday loans are completely unsecured, which means that you won’t have to put up any collateral. This is why these loans are so low risk and attractive to many people.

  • Flexible Terms

The flexible terms that come with payday loans make it easier to repay the money you borrow. Most private lenders are willing to work with you to a certain degree. Banks on the other hand are usually very strict when it comes to repayment schedules.

  1. Fixed Interest Rate

Interest rates for payday loans are almost always fixed, which means they stay the same for the entire duration of the loan. Bank loans can come with variable rates, which means irregular payments that are unpredictable and difficult to budget for.

There are lots of reasons why you should think seriously about getting a payday loan over a bank loan. The fact is that an increasing number of people are starting to apply with private lenders because of the many benefits their loans offer. If you are currently in need of money, you should take some time to look into this option. You could end up getting exactly what you need to take care of whatever expense you have at the moment.