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Basic Information to Assist you With Your First Payday Loan

The first question that seems to be asked by people who have no experience with payday loans is...

What is a payday loan?

A payday loan is simply that. A loan you receive and pay back by your next payday. There obviously is more to it than that so let's move on.

Why can't I just go get a bank loan?

There is no reason you can't apply for a bank loan. You may or may not be approved and bank loans require a good deal of paperwork, questions into your personal finances and then days for approval.

Payday loans have little, or no, paperwork upon application. There are online lenders that tout they are faxless loans.

There are not questions regarding how much you make per month, what your expenses are or any other personal information that you may or may not be inclined to disclose. And your approval is usually done in minutes.

This is possible because payday loans have different lending laws than do banks. And payday lending institutions have limits on how much they can lend you. For instance, most loans don't go higher than a couple thousand dollars.

Are the interest rates very high?

The interest rates, or fees, with a payday lender are not abnormally high. If you were to have a payday loan for longer than it was meant for, then yes, the interest rates can be very high.

This situation is not ideal for you, that is why it is very important to know that payday fast cash loans are short term loans. I need to point out that the interest rates when compared to banks APR's, the numbers may be staggering.

This is where the critics of payday loans start making noise. Short-term interest rates are carried into your loan any time that you default.

Meaning, the longer you take to pay back the loan, the longer you are paying those high short term interest rates and then it is not very long before your original loan is much larger than when you received it. There is no comparison though because they are two different types of loans.

What is the application process? What do I need to attain a payday loan?

The application process is so simple you may just not want to believe it. Obviously they need your personal and contact information.

They will require so many paycheck stubs to prove you have consistent work to pay the loan back on your next payday. And then finally, a post-dated check from you to be cashed on the day you have been paid and pay the loan back in full.

If you want a direct deposit, which has become so popular these days, you will need proof of a bank account. That is it. You can work it out with your specific lender how you pay it back.

You can set up that time for your second next payday. There are people who write their post-dated check for half the amount and then another for the date of their next check. Those details can be worked out with your lender.

What if I have bad credit?

Even if you were just turned down for a loan at a bank, you could still walk into a payday lending office and be approved for a loan. If you have all the requirements we just talked about; pay stubs, address, SSN, etc, then you are in the clear.

Granted, there may be other reasons or stipulations that a particular lender has that may disqualify you, but that is not the usual case at all. These loans are for people who need money fast, and for people who cannot get money from banks because of their credit. The approval rate for payday loans is quite high.

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