A payday loan refers to a short-term loan designed to help you to pay for immediate expenses until you receive your next paycheck. Remember that these loans usually attract annual percentage rates and most of their payments can be due within a couple of weeks or even close to your payday.
The truth is that you need to apply for payday loans if the traditional banks make it hard for you to get a loan. Before you decide to apply for one, it’s crucial to understand what you can get and what the lender expects from you. This article discusses key things you need to know before applying for a payday loan.
How payday loans work
A payday loan works differently compared to personal and many other consumer loans. Therefore, depending on where you reside, you can access payday loans online or even through a physical shop where there is a payday lender.
Many places have different laws when it comes to a payday loans. This means there can be a limit to how much you are allowed to borrow or even how much the lenders may charge in fees and interest.
When you are approved for payday loans at Kansas payday loans, you can receive a check, cash, or they can deposit the money into your bank account. But you need to pay back this loan together with the finance charge once it’s due. The due date for most payday loans is usually by your next paycheck or within 14 days.
Keep in mind that a payday loan has a finance charge that is based on the loan amount. Since a payday loan has such short repayment terms, it means some lenders can charge a high APR.
Why do many people prefer getting payday loans
Regardless of the finance charges, there are many people out there who take payday loans every year. There are good reasons for this popularity. One of the reasons is that many people find that payday loans are easier to get than the other types of loans. Some of these people have no income or poor credit, so it prevents them from accessing personal loans offered by traditional banks.
Another reason is that some people are not comfortable asking friends or family members for help. It’s worth noting that while payday loans are available, they can sometimes be hard to find them.
As explained earlier, many people prefer getting payday loans as they are quite easy to access. No wonder, there are now more payday lender stores in many places. Even better, payday lenders require just a few requirements for approval. Many of these lenders don’t even run a credit check and don’t require you to have the means to repay your loan. All that a lender can require is for you to have an identification, a steady paycheck, and a bank account that is relatively in good standing.