Too many people, debt is a bad word. But during an emergency, quick access to cash can help you get out of a pinch.
Payday loans are a common short-term loan option when you’re looking to get cash quickly. Payday loans requirements vary by lender, but here’s how to get approved for most payday loans.
What is a Payday Loan?
A payday loan, sometimes referred to as a cash advance, is an unsecured loan offered by alternative lenders. The loan isn’t linked to your paycheck.
Instead, the term ‘payday’ comes from the idea that quick access to cash can hold you over until your next payday. Payday loans are always short term and for small amounts.
Since funds are usually intended to give borrowers instant access to cash between paychecks, some loan terms require repayment to begin in just two weeks.
Payday loans are common. Around 2.5 million Americans take out payday loans each year to cover a variety of unexpected expenses and emergencies.
Because of the convenience of payday loans, fees are higher to cover the cost of the transaction. Borrowers for payday loans vary from poor to decent credit.
How Much Can I Borrow?
Payday loans range between $100 and $500. The average payday loan is $350 with a term of just two weeks.
Some states, like California, cap payday loans at just $300. In Kansas, the maximum allowed payday loan is $500.
Borrowing what you can afford to repay is more important than getting the amount you want. If you don’t repay the debt within the agreed-upon loan period, you’ll be charged penalties that could exceed the amount of the initial debt over time.
Payday Loans Requirements
When you go to apply for a payday loan, there are standard items most lenders want to see. Take a look at the following list of typical payday loans requirements to help you prepare for your cash advance:
Government Issued ID
Bring a government-issued form of identification when applying for a Kansas City payday loan. Examples of accepted identification include a state-issued ID card, driver’s license or a passport.
Photo ID is required and should match the name on other supporting documents. Never bring expired identification to apply for a loan.
You must be 18 or older to apply for a payday loan.
Social Security Number
Bring your social security card when applying for a payday loan. A copy may be acceptable instead of a physical card.
Call ahead to the payday loan location to see whether an original social security card is required.
Payday lenders don’t require good credit to issue a payday loan. Instead, they ask that you have a steady paycheck to prove you can repay the loan.
Bring proof of income when applying for a payday loan. Proof of income varies depending on your employment circumstances.
In general, pay stubs are requested. Copies of checks or other electronic payments from an employer might also be accepted.
In order to qualify for a payday loan, you must have an active checking account. Closed checking accounts don’t allow lenders to verify your identify or draft payments from your account.
When you apply for a payday loan, a personal check is held as collateral. In most situations, borrowers write a check for the full amount of the loan including a lending fee.
When the loan comes due, the lender cashes the check. If the borrower is unable to pay, the loan term can be extended with a new lending fee.
Things to Know Before Getting a Loan
It’s important to understand how loans work before pursuing a payday loan. Payday loans are intended to be quick sources of emergency cash.
They are not a regular means to pay off personal expenses or debt. Payday lenders make access to cash quick and easy to help borrowers get out of emergencies.
The small amount of the loans equals that of a paycheck so that repayment is simple. With traditional loans, credit history is extremely important.
Payday lenders focus less on credit history to grant everyone the opportunity to take care of financial emergencies. The cost of giving access to high-risk borrowers, or people who may not repay the debt, is higher interest rates and fees.
These fees help cover the expense of issuing loans to borrowers who don’t pay back the loan. Around 46 percent of payday loan borrowers don’t repay their debt.
The cheapest way to borrow is to repay your debt on time. Constantly renewing a payday loan is a sign you borrowed more than you can afford to pay back.
Payday loan terms usually last between two and four weeks. Plan ahead before getting your loan.
If you’re confident in your ability to repay within the two or four week period, then a payday loan is a great option for getting instant access to cash.
Emergency Cash Relief
Payday loans can save the day in any financial emergency. Because they’re issued in small amounts, payday loans are easier to repay than conventional loans.
As long as borrowers understand payday loans requirements, these loans can help them emerge from a financial crisis quickly. Borrowers who don’t understand the terms of a payday loan can easily become overwhelmed.
It’s much easier to borrow a small amount of money then get another payday loan at a later date than it is to borrow too much and struggle to repay. Payday loan default goes on your credit report and destroys your relationship with the lender.
Take advantage of the payday loan opportunities near you. Visit our location to apply for your next payday loan.