Things To Take Note Before Applying For A Loan From A Payday Lender
A good number of people are applying for payday loans either to pay off their debts or for other personal reasons. Simply put, a payday loan is short term and small loan (anywhere between 100-2000 dollars), available for a period of 16 days to even 1 year. Payday loans are generally taken during emergency cases such as during medical emergencies. Below are some of the points that you must remember before taking a loan from a payday lender.
1. Payday Loans are Short-term:
A payday loan is taken for a short period of time. Hence, as the borrower of the loan, you must pay the amount back in just a few weeks after receiving the amount. The payday loan lender will first determine whether you have enough resources to pay the amount back and grant a loan only after confirming your financial status.
2. Check the Terms& Conditions Carefully:
Once the loan has been approved and the borrower receives the contract, he/she must go through the terms& conditions carefully. The contract contains all the important information as well as details with regard to the payday loan. It also includes information such as the loan fee payment details as well as the date by when the loan amount must be fully paid by the borrower. A borrower must check the contract carefully or he/she may end up paying way more than they had expected.
One of the biggest benefits of securing a payday loan is that you can get it instantly. Whether you’re in an emergency situation or even if you’re falling short of funds, you can get your payday loan in less than twenty four hours after it has been duly approved.
4. Bad Credit Has No Role:
If you’re one of those individuals who have had a history of bad credit and are wondering whether you would receive a payday loan or not, then be rest assured that you’ll get one easily. Most of the lenders don’t scan your credit details very closely, especially in the manner that banks or other financial institutions do. Hence, you can secure a payday loan despite bad credit.
5. Fees and Interest:
As per the newly formed regulations, a borrower shouldn’t pay any interest or fee that exceeds 100% of their original amount. Hence, it’s important to cross check the interest and fee that your lender is levying on the amount being sanctioned as part of the payday loan.
6. Check the loan term:
Before taking any payday loan, borrowers must also check the minimum term for which the loan is being granted to them. Payday loans are usually granted for a period of sixteen days. Also, payday lenders offer loans in accordance with the borrower’s salary structure. Hence, if you receive your salary every 15 days, then the loan may be granted for two fortnights. On the contrary, if you get paid every month, you may have to pay back the full amount after you receive your next salary.