How Do Payday Loans Work?
Payday loans are cash loans with short term periods. These are often based on the personal check of the borrower which is held for future bank deposit. There are also some loans that based on gaining electronic access to the bank account of the borrower. A borrower who qualifies for such a loan will issue a personal check indicating the amount to be borrowed and the finance charge to be paid together with the principal. The borrower will then receive cash from the lender.PersonalDebtRelief.net offers a simple, step-by-step online payday loans application process to our customers:
Step 1: Fill in the online application here.
Step 2: We present your completed application to our vast network of lenders in order to find a lender that is most likely to approve your loan. You will not be charged any hidden fees by using PersonalDebtRelief.net.
Step 3: Upon qualification, the money will then be directly deposited into your bank account within a few hours.
About the Payday Loan Industry
- There are a lot of places that offer payday loans. These include payday loan stores, pawn shops, and check cashers. There are also a number of rent-to-own companies that offer these loans. You can also apply for an online payday loan here at PersonalDebtRelief.net
Terms and Regulations on Payday Loans
- The size of payday loans range anywhere starting from $100 up to $1,000. The minimum and maximum amount allowable also depends on varying state laws. The average term for these loans is two weeks. Most payday lenders usually charge 400% annual interest, but there are some that charge higher or lower. To borrow $100, a finance fee will be charged, with fees ranging anywhere from $15 to $30.
Cost of Payday Loans versus Other Types of Cash Loans
- Compared to other types of cash loans, payday loans are associated with higher costs. However, these loans can still be ideal for certain situations. Some examples include: if a borrower needs to gain quick access to quick cash resources, has a low or bad credit score, or was denied of other loans because of lack of requirements.
Requirements to Apply and Qualify for a Payday Loan
- There are only a few requirements that a borrower needs to complete in order to qualify for a payday loan. These include a valid, open bank account, a stable income source, and a form of identification. Lenders do not require full credit checks when determining whether a borrower will be able to repay the loan or not.
Legal Status for Payday Loan Lending
- In the United States, 32 out of the 50 states authorize and regulate payday loan lending. In the District of Columbia, 18 states provide protection to borrowers with small loan rate caps. In Arkansas, the Supreme Court ruled that the payday loan law it implements was unconstitutional. In the past years, several states, including Arizona, Montana, New Hampshire, Ohio, and Oregon re-imposed their rate caps.
Types of Protection Provided to Service Members and Dependents
- In October 1, 2007, federal protections aimed towards service members and their dependents took effect. The Department of Defense regulations also apply to tax refund loans and car title loans in addition to payday loans. Lenders have been prohibited to charge over 36 percent annual interest for certain fees associated with these loans.
Reminders When Taking Out Payday Loans
- While such types of loans offer higher level of convenience and faster application as well as qualification processes, consumers are advised to take these loans out only when they really have the need to, such as in emergency situations wherein one needs to have access to financial resources as soon as possible.
Checks for Loans – Risks and Cost
- An unpaid payday loan involves a check not covered by funds on deposit in the bank account of a borrower. Failure to make repayments will then lead to the bounced checks accruing fees from the lender, not to mention the borrower’s bank. Returned checks have a negative effect on credit ratings both on credit reports and specialized databases.
An individual can have his or her bank account closed if this happens. Developing a record of having bounced checks when taking out payday loans may also result in a person having problems opening a new account with a bank. These problems can be prevented if a borrower makes good on the checks issued and by making payments on time.
Internet or Online Payday Loan Lending
- For those who are interested in applying for a payday loan, it is recommended to work with an online lender. Highly reliable Internet or online payday loan lenders provide greater security for transactions made via the internet. This process also adds more convenience to borrowers, since they can apply online. Upon qualification, the money will then be directly deposited into the bank account of the borrower. The repayment, including the interest rate and other fees, will then be withdrawn by the lender on the borrower’s next payday.