Is a Short Term Payday Loan the Right Solution?

A short term payday loan can mean the difference between making it to your next payday and being trapped in a financial crisis with no way out. But, what are payday loans? How do they work? What are the interest rates? Is an online payday loan right for you?

Below are some common questions and answers about cash advance loans:

What are payday cash advance loans?

A payday loan is a way to get quick cash for an emergency. This type of loan is meant to be paid back in a short period of time, typically on your next payday.

How do the interest rates compare on short term loans versus bank loans?

Interest rates on payday loans are often higher. Payday loan lenders generally do not use minimum credit scores and require fewer qualifications than banks. Since these lenders take on a greater risk, they assess higher interest rates. Rates are comparative to some credit card cash advance rates.

What requirements need to be met to qualify for a payday loan?

Qualifications vary from lender to lender, but as a rule, requirements include having a regular income, a checking account, United States citizenship, and applicants should be over 18 years of age. Those with bad credit ratings may still qualify for a short term payday loan.

Is it fast? Is it easy to apply?

Yes. By filling out a brief online application and supplying your lender with the required information, it is possible to receive cash in your bank account the same day you apply.

What are the repayment requirements?

A short term payday loan is just what its name implies – a loan that is paid back in full on your next payday. Most lenders will automatically deduct your loan payment from your bank account on the due date, eliminating the need for mailing a payment.

Are payment extensions available?

Many lenders will grant extensions, but it is not advisable unless absolutely necessary. Because a short term payday loan is high interest, loan extensions will result in a dramatic increase in the amount of the loan, making it more difficult to repay.

Are there any tips for fast qualifying for a payday loan?

Yes. By applying during normal business hours when lenders offices are open, swift approval, and quick access to cash is more likely than when applying on a weekend or after hours. You may still apply after hours or on weekends, but there may be a short delay. Provide the lender with all the requested information as soon as possible to expedite the loan process.

What is the best way to manage a short term payday loan?

Before applying for a payday advance, make sure you can pay it back on time. By managing your loan properly, you establish a positive relationship with your lender and may improve your credit rating at the same time.

For many, access to quick cash is difficult because of past credit history. A short term payday loan is an option for those who cannot qualify for loans elsewhere or who need funds immediately. By paying the loan back on time and depending on a cash advance only during an emergency, a payday loan may be the best option.