Payday Advance Lending in the USA: What is It?

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Loans fall into two main categories. The first category are secured loans such as an auto loan or a mortgage. The second category are unsecured loans such as a credit card or a payday loan. What is a payday loan, and how do you apply for one?

What Is a Payday Loan?A payday loan is a form of credit that is extended to borrowers who have no credit history or a poor credit history. Lenders will extend credit in small amounts that are to be repaid in roughly 15-30 days. The repayment period is meant to coincide with when you expect to get your next paycheck. However, many payday lenders will extend credit to those who do not have a job.

How Much Can You Borrow?

Borrowers who have a relationship with the lender could borrow up to $1,500 or more. For those who borrowing for the first time, it is common to see loan amounts of as little as $100. While your credit will not be checked, borrowers who have a steady income will usually get more than those who are unemployed or have other red flags on their application.

How Do You Apply for a Payday Loan?

Applying for a payday loan is an easy process. The first step is to choose a lender that you feel comfortable working with. You can choose to work with a lender at a physical location or with a lender that is based online like cash advance loans site AdvanceLoan.net. If you work with a lender in your community, you have a better chance of developing a good rapport with that lender. When you work with an online lender, it takes only minutes to fill out the application, receive a loan decision and get your money.

Can You Secure a Payday Loan With Collateral?

Although a cash advance loan is an unsecured loan, some lenders may allow you to secure the loan with collateral to lower your interest rate or other fees that you may face. If a low interest rate is important to you, talk to your lender ahead of time about ways to keep your rate as low as possible.

A payday loan is a form of credit available to anyone regardless of their credit or employment situation. If you need to pay a car note, pay your student loan or need cash to tide you over until your next paycheck, this may be an option that you want to look at.

Payday Loan Payback Terms in the USA- What Are They

Every payday loan vendor will have different terms on how the individual will pay back, and how much money is due. The loans are easy to get and most individuals can be approved easily. The APR rates, however, are extremely high for the loans that are taken out. Some companies will allow individuals to pay back the loan within seven to 30 days depending on their paydays from work, the amount of funds they are borrowing, and the interest rate they want to pay back on the loan. For example, an individual may borrow $300 for 30 days that has a 350 percent interest rate. The loan amounts can range from $100 to $1,000. Some lenders may even have higher amounts that can be borrowed.

Every state will have their own fees and rates that will be charged to the individual receiving the payday loan. It is best to look up those rates within the state the loan is being taken out of. That way, the individual will have more accurate results to the interest rate.

Now, non-payment of the loan amount by the due date will cause additional fees and interest. The payday loan company will be able to make collection efforts from the customer as soon as non-payment has taken place. Some lenders may have a policy regarding late payments. Individuals may be able to contact the lender to advise of the late payment and the date that the payment is expected to be paid on. That way, they will be fully aware of the late fees, interest rate, and the date they need to make the payment on. The sooner the payday loan can be paid back, the more interest rate an individual can save compared to being late.

When an individual makes their payment in full to the payday loan lender, including the interest amount due, they can reissue the loan out. This will allow them to get the loan amount back, but they will have to pay additional interest on the loan. For example, if the loan amount was $200 with a fee of $58, they will have to hand over $258 before they can get the $200 reissued. This will prove to the payday loan company that the individual did have the full amount available for them to pay. They cannot pay just the $58 to extend the time on the loan.

Most lenders will let individuals apply online for the loan and will have the individual approved within 24 hours. All the individual needs to apply is the following: their name, address, amount of loan needed, phone number, email address, birthday, social security number, and driver’s license number. Some lenders may ask for additional information to make the determination of the approval for the loan. Some places may have slightly different terms from other lenders, and all of the fine print should be read on the loan terms to understand them fully.