Many a times you may find yourself in a situation where you need instant cash, but your pay is not due for a couple of weeks. You may decide to borrow money from friends, but your friends and family members might themselves be broken, and you may not have any other option. In such a desolate situation, payday loan is the ultimate savior.
Now do not get confused between a payday loan and a personal loan. The former is a short-term loan, which needs to be paid back as soon as you receive your next salary, while the latter is supposed to be returned in multiple installments over the course of time. Life in the modern world has become so challenging that we can face a financial emergency at any stage and one should be mentally prepared for that all the time. Below are a few factors involved with payday loans:
Find a Creditor with a Low Interest Rate
You would surely not want to return a lot more than what you owe to a creditor. Therefore, before applying for a payday loan, you should do thorough market research and see which creditor offers you the lowest interest rates. For a payday loan of $500, you are likely to pay somewhere between $50 and $150. However, the rate largely depends on the creditor you are choosing. Keep in mind that the interest rates with payday loans tend to be a lot higher in comparison to personal loans. Nevertheless, the procedure of getting a payday loan is much faster and easy. Some creditors even approve the loan within an hour, so you can fulfill any urgent obligation.
Must be 21 and possess a stable job
In most countries, you must be 21 years of age with a stable job to apply for a payday loan. Check out with the lender for this.
No collateral required
Your application for a payday loan should get approved within a day or two, and you will be handed over the amount in cash, while no collateral is required with it. We call it the best thing about these littleloans.
Check the reputation of the lender
Before signing the deal with creditor, it is highly recommended that you check the reputation of the lender and make sure that they have not received consumer complaints in past. In order to do so, you can go online and search for reviews for that creditor.
The timeframe of returning the payday loan may vary from one person to the other as some get paid weekly while the others receive their salaries on monthly basis.
These are just a few factors to consider while applying for short term loans. For more details, you need to check the terms and conditions of the particular financial institution you are considering for loan.