People that are strapped for cash and are unable to get a loan from a bank often turn to payday loans to get the money that they need. These loans can be obtained in a short amount of time and the money can be used for anything that the borrower wants to use it for. If you are interested in obtaining a payday loan, it is important for you to know how payday loans work and where you can get one that meets your needs. Here are the most important things that you need to know.
How They Work
Payday loans are short-term loans with amounts ranging from $100 to $1,000. They are called payday loans because they usually must be repaid by the borrower’s next payday, or two weeks after the loan has been extended. To obtain the loan, the borrower must have a steady job, proven with a recent paystub, and a checking account with a local bank. The borrower writes out a check for the full amount of the loan and any fees being charged for the loan when they obtain the loan. The borrower has up until the due date to repay the loan to the company and receive their check back, or the check is deposited and the funds are withdrawn from their bank account.
Where To Get Them
Over the past decade, payday loan lenders have sprung up in storefronts across the United States, with thousands of lenders now available at physical locations and online. Whether or not you will be able to obtain a payday loan will depend on the state that you live in, as some states have banned the loans due to their high fees and interest rates. If your state does allow companies to extend payday loans to its residents, most of the locations for getting one will be located in urban areas where the companies can reach a wide range of potential customers.
Things To Know
Payday loans are one of the most expensive financial products you can obtain. The very short time period available for repaying the loan means that you are paying an astronomical interest rate for the loan, far above what you would pay for a bank loan with a longer repayment term. Many people also have difficulty repaying the loan in full at their next pay period, leading to a cycle of obtaining new loans to pay off old ones and paying the fees for loans over and over. Before obtaining a payday loan, be sure to read all of the terms and conditions associated with the loan to ensure that you know what you are agreeing to when you sign to accept the loan.