Payday Loans – Everything about What They Are and How They Work

What are Instant Payday Loans?

Troubled economic times come without a warning and such situations do not even give enough time to think about a possible befitting solution. At such times, getting an instant payday loan would probably be the most convenient and appropriate solution.As the name suggests, Instant Payday Loans are short-term loans that can be availed instantly. They are cash advances that are supposed to be paid back on the next paycheck day of the borrower. They are small sized loans that help in assisting people to fulfill their immediate financial needs especially when they cannot wait until their paycheck comes. So, it is easier to get financial aid from private lenders in the form of a payday loan and the cash advance can be used to pay off any immediate debts or to make any urgent purchases and can be paid back on time after the paycheck arrives before there is a drop in the credit score due to amassing of interest rates and unpaid credits.

The payday loans are more popularly known by other different names, like – ‘payday advance’, since the amount is taken as an advance ahead of the payday; as a ‘quick cash’ loan or as ‘cash advance’ or a ‘short-term’ loan, since the loan is taken over a short period of time and the cash is given as an advance. It is also called as ‘small-dollar’ loan as small amounts of money is taken as a loan for a short-term and also as a ‘personal loan’, as it is usually taken to fulfill personal financial necessities.

Criteria to Apply For a Payday Loan

There are a few important criteria that a borrower has to fulfill in order to be eligible for getting an instant payday loan.

1. Jurisdiction - Not all states in the United States are likely to provide a payday loan. Payday loans are legally available only in 32 states in the US and 18 states completely forbid the practice of providing a payday loan. The 3 other states offer different other forms of short-term loans or payday loans at a lower interest rate.

The 32 states in the US that provide legalized payday loans include – Alabama, Wyoming, Alaska, Wisconsin, California, Washington, Delaware, Virginia, Florida, Utah, Hawaii, Texas, Idaho, Tennessee, Illinois, South Carolina, North Dakota, Indiana, Rhode Island, Iowa, Oklahoma, Kansas, Ohio, Kentucky, New Mexico, Louisiana, Nevada, Michigan, Nebraska, Minnesota, Mississippi, and Missouri.

The states that provide the payday loans at very low-interest rates by setting usury limits include – New York, New Jersey, Georgia, Arkansas, Maine, New Hampshire, Montana, South Dakota, Oregon, and Colorado.

The states where payday loan practice is prohibited or stopped now include - Arizona, North Carolina, Connecticut, Massachusetts, West Virginia, Pennsylvania, Maryland, and Vermont.

The US legislation has imposed many rules and restrictions on the practice of providing a payday loan which is dissimilar in different states. While some jurisdictions have very few restrictions regarding the payday loans, a few of them put a limit on the APR, and a few have completely prohibited the provision of payday loans.

So, you will have to be a legal resident of the state that provides a payday loan legally to avail one.

2. Age – You will have to be a legal adult who is 18 years old or above. This is important as minors are not allowed to handle financial contracts on the legal front. You will have to provide the lender with a legal document to prove your age.

3. Residency – It is important that you are a legal permanent resident of the US. It is not requirement for you to be a US citizen. However, you should be permanent US resident and you should provide the legal documents to prove the same to the lender.

4. Active Checking Account – It is essential for you to have an active checking account which is a source of proof for your residency and for your income. This account is also important if you are looking to get an online loan so that the lender can deposit the loan cash in your current checking account by wire and the repayment can also be done in the same way.

5. Employment and Income – Most payday loan lenders will provide a loan based on the previous payroll details and employment history. So, it is important that you have a clean employment history and are currently employed with a steady income that is sufficient to manage your monthly expenses and pay the loan. It is important to provide a legal proof that shows that there is a steady income flow in your account which shows that you are capable of repaying the borrowed loan. The income could be of any form – either as a salary or as benefits.

Once you are considered to be eligible under all the above-given criteria and after you provide all the required legal documents, then the lender will go ahead and process your payday loan.

Look for Licensed Lenders

Every state page has all the details regarding the availability of payday loan practice in the respective state. The page will show a list of the regulatory laws with reference to the APR, the usury cap limits, the citations to limit the rate cap on small loans, the list of payday loan lenders who are licensed and authorized by the government, their websites, and contact information. There are also laws regarding the protection of consumers against criminal usury.

It is important that you explore well and find a state-licensed lender according to the borrowing loan amount, the APR, type of loan, and other factors. You can find a good list of all the reliable lenders with us at instantcreditloansus.com and go ahead with your loan application.

The Typical Payday Loan Process

A typical payday loan process will start with the borrower filling a loan application in which the required loan amount and other needed details shall be mentioned. The lender will carry out some basic verification and check the age, residency, and income proof of the borrower. Although many lenders will not perform any credit checks, a few of them may look into the income history and bank statements to confirm that there is a steady income flowing into the borrower’s account on a regular basis. However, each payday lender, credit unions, or individual financing franchises will have their own criteria and underwritings.

After the verification process is completed successfully, the lender will approve the payday loan. As the name suggests, the borrower will have to repay the loan on the payday i.e. on the day when the next paycheck arrives. The borrower will provide the lender with a post-dated check citing the whole loan amount along with the APR and fees. The borrower will usually come back on the payday or on the day of loan maturity and pay the loan amount as a lump sum to the lender. If the borrower does not turn up, the lender will deposit and redeem the check.

In any case, if the borrower does not have enough funds in the account when the lender has deposited the check, then the borrower will be subjected to the check-bounce penalty in addition to the loan amount. If the borrower still defers paying the amount, then the interest rates will increase and the payable amount will keep getting accumulated.

Online Payday Loans

Recent technology changes and innovations have allowed applying for a payday loan an easier process as it can be done online too. Most of the payday loan lenders provide simple and easy online tools that will enable the borrower to file an online loan application. If the lender needs some documented proof, then the applicant will have to fax them to the lender. Once the loan has been approved, the lender will credit the amount to the checking account of the borrower.

Most of the online tools are very simple so that it is easier for the common man to file an online loan application. The borrower will have to provide the necessary information and details while filling out the online application so that the application can be qualified. When this process is done, the cash is transferred to the account electronically. This becomes easier and convenient as the needed cash will fall into your account in a stipulated time and the borrower can withdraw it from any ATM or use the card linked with the account to make any purchase, etc. At instantcreditloansus.com, we will help you connect with the lenders who will offer very convenient options for you to get an online payday loan.

So, all you will need is an active internet connection and a computer. Fill out the complete online loan application and you can get your approved as quickly as possible.

Payday Loans over a Phone Call

There are many people who are not familiar with using the internet or are not comfortable filling an online application, or many a time there are situations where many people do not have an access to the cyberspace or a network connection. A few people are assured and feel secure when they have a P2P conversation and can ask for the tiny details and doubts while filing a loan application.

For such consumers, most of the credit financing companies and the private money lenders tend to provide the option to apply a loan application over a phone call. Bigger financing companies have a toll-free number that will provide 24 x 7 customer care and is always ready to help the consumers to deal with any kind of a trouble while filing for a loan, whereas smaller and individual lenders will assist the borrowers personally or will have a manager do so for them.

Although the online application service is convenient and easier, the alternative telephonic provision for filing a payday loan application is for the consumers who cannot meet their online demands.

Why Should You Choose Payday Loans?

There are plenty of logical reasons why you should be applying for a payday loan instead of option for any other kind of small loan. There may be times when you are just 10 days into the month after your paycheck came in and you have money in your hands to survive until the next payday. A sudden emergency or an unexpected bill or a sudden discounted purchase will need immediate cash which will not wait until your next paycheck comes in. Getting a quick online cash advance will help in dealing with such situations easily and conveniently. Since most payday loans are given for smaller amounts, it is more manageable to pay them back at a scheduled time. At instantcreditloansus.com, you can avail the short-term payday loans that have become quite popular in the loan market as we offer the following features –

• A Convenient Option – Instant Payday loans are convenient. Most lenders provide online options which make it easier and faster to apply for a loan and to get the money into the account.

• Lesser Hassles –Conventional banks carry out a lot of complicated paperwork and a lengthy verification process which usually takes a long time for processing. The payday loan processing is comparatively less and there are no hassles of complicated verification and paperwork.

• No Collateral – Many traditional banks will need you to assign collateral or bring in a cosigner as surety against the loan you have applied for. This not only takes a lot of time and paperwork, it is also a setback for people who do not have much to place as a guarantee. Unlike the banks, payday loan lenders will not ask for any collateral or cosigner. They provide the payday loan as an unsecured loan and so they will apply appropriate APR as surety.

• Quicker Approval Times – Since the loan processing and verification times are less the overall loan processing time is also reduced considerably. Many lenders follow the‘instant payday loans same day approval’ requisite i.e. most of the payday loans are approved on the same day within a few hours else it would be done by the next business day. We, at instantcreditloansus.com, will make sure to provide you with the much-needed loan as quickly as possible by communicating with the lenders.

• Prompt Credits – Getting an online application helps to get a prompt credit for the applied loan. As soon as the application is approved, the lender will promptly transfer the loan amount into the borrower’s checking account. However, even if the payday loan application is filed on a P2P basis, the cash is given to the borrower quickly.

• Round-the-clock Availability - Apart from providing the ‘instant payday loans same day approval’ amenity, the payday loans also offer the facility of being available to the consumers on a 24 x 7 basis. The lenders and the customer care agents are available round-the-clock to answer queries and to provide an instant cash advance loan in times of emergencies. Our representatives at instantcreditloansus.com will be available to provide you with all the required details for your queries.

• Best Solution While In Urgent Need – While processing the loan application, the lenders tend to ask and clarify regarding the situation for which the loan is being taken. If it is a genuine reason especially during emergencies, the payday loan will get approved instantly once all the required documents have been submitted and the formalities have been completed. If you are getting in as an online loan, then even the few intrusive questions will not have to be answered.

Effect of Credit Scores

Credit scores are the checkpoints which give an idea about your financial history in just a gist. Any due bills or default payments will show up as a scar on the credit history. A low credit score indicates that there have been flaws while repaying a past loan or if there are any unmanageable pending bills. Either of it will be seen as a blemish to the financial credibility of the borrower. So, it is better to keep a track of all your payments and due bills and manage them sensibly so that it does not affect your credit scores adversely as it will be difficult in the future.

However, being irresponsible or being lazy is not the only reasons why a payment got missed out on time. There could be many genuine reasons why a bill payment date got missed out or a payment went beyond your due date. But the banks do not wish to care about your reasons. They will only look at your credit numbers and decide if the loan process can be taken ahead or be rejected. This is not the case with the private money creditors. They will carry out a soft and a meager verification process to check for the authenticity of the borrower. Once the required documentation and verification for short-term loans bad credit has been completed successfully, the loan will get sanctioned instantly. At instantcreditloansus.com, we will make sure that you get a second chance and your application for short-term loans bad credit with the lender will get approved as quickly as possible.

Suitable Repayment Options

In order to have a good credit score, it is important to pay the bills and loans back on time. The lenders also believe that you would be a responsible person and provide you with the instant loan being assured that you will repay on time. The lenders will provide the loan after scheduling the repayment options like the date, amount, interest rates, fees, mode of payment, etc. Typically, for a payday loan, the borrower pays back on the next payday or when the paycheck comes in.

So, if your payday is once in every 2 weeks, or if your paycheck comes in at the end of the month, then you can plan your repayment schedule according to those days. If you cannot pay the whole loan amount along with the interest and fees at once, it is better to intimate the lender beforehand so that the situation can be worked out and a better deal can be planned in a timely fashion.

Be Wary of the Details

There are plenty of financiers and private credit unions that will take advantage of your situation and apply very high-interest rates and charge sky-rocketing amounts of fees. And during desperate situations, people will only look towards having a solution rather than analyzing if it is the best or the right option. So, it is mandatory to think wisely and explore well. Look for the lenders who are state-licensed as they will abide by the regulatory rules imposed by the government with regard to the APR and payday loans. It is also essential to look for the genuine lenders who will provide you with the most appropriate and suitable plan by taking into consideration your income levels, the reason for taking the loan, your credit scores, etc.

It is important that you keep enough balance in the bank account after your paycheck comes so that you can pay back the loan on time and can avoid any check bouncing damages. It is also advised to take a small amount of money as a payday loan. It is better to loan the amount which is exactly needed to deal with the emergency rather than taking a huge amount which becomes burdensome to be repaid on time. Not paying on time will only build up the interest rates and the accumulated loan amount. As it is a non-secured short-term loan that is provided without a credit check, the lenders will apply the interest rates accordingly so that they will not have any loss in their business. So, it is better to take a small-sized loan and pay off the immediate debts and manage well to repay the payday loan with the next paycheck.

At instantcreditloansus.com, we will connect you with the state-licensed genuine money lenders who will provide an appropriate payday loan plan which will be very economical and efficient for you and also, we will make sure that they approve it as quickly as possible for you to meet your critical financial needs instantly.