How Payday Loans Work

Let’s have a recap first. Payday loans are short term, fast and hassle free loans that are the ideal solution for any unexpected shortage of money that may arise in your life. It can be a medical bill, a credit card bill, a loan installment, money to repair your car, fees payment or just a shopping deal that you cannot afford to lose out on. You can borrow $100 to $1500 via payday loans and it needs to be repaid by the next or subsequent paydays. Payday loans are the second name for convenient lending. So you can apply for it from just about anywhere. There are thousands of payday loan outlets around America and you can either walk into any one of those or apply online. The online payday loan industry has really boomed in the last few years. Log on to any search engine and search for payday loans to choose an online payday loan lender.

Criteria to be met

Most lenders have three requirements that will qualify anybody to receive a payday loan or a cash advance.

  • The person must be a US citizen and over 18 years of age.
  • He/she must be employed and make at least $1000 every month. ($800 every month if he/she receives the income via a government program like social security)
  • Must have an active savings or checking account with an American bank.

That sums it up. If you satisfy the above mentioned criteria, then you can qualify for a payday loan within minutes. There is no pre-approval verification or unwanted documentation. If you look closely, you will find that there is no credit check either. This is one of the biggest advantages of a payday loan over others forms of loan. It means the payday loan lender will never look at you as if you have the worst case of an extremely contagious disease called bad credit. You can get a loan irrespective of your credit score. Once you qualify, you will either receive a check for the amount or it will be credited directly into your checking account.

Repayment

Borrowing money is always great until you have to repay it. Payday loans have to be repaid by your next payday. Let’s say your payday is on the 10th of every month and you borrow on the 21st of the month. Then you have about 19 days to repay the loan plus an interest fee (about $15 on every $100 borrowed). You can arrange for the money to be debited directly from your checking account on the next payday. Or, you can give the lender a post dated check that will be cashed on the payday. If you are unable to make the payment on the next payday, it can be extended to subsequent paydays. But the interest rates will keep mounting and additional late payment charges will also come into the picture. Believe me, you don’t want to do that. Some other repayment options offered by most lenders are

  1. Repay the loan amount and roll ahead the interest charges to a separate loan.
  2. Repay the interest amount and part of the loan and roll the remaining amount to a separate loan.
  3. Pay only the interest charges and roll the entire loan amount to a separate loan.

But if you look at all these, you will notice something common. They all require you to borrow another loan. Now, unless you have another emergency requirement for money, why would you want to borrow another loan? So stick to your plan and repay it as soon as possible. Here’s a tip. If you find yourself in financial emergencies more often than not, then you need to go back to the drawing board and review your finances. Do not rely on payday loans as a long term solution for all your financial woes.

Payday Loan Companies Facing New Postal Competition

When using payday loan services, an applicant must have an active bank account. For those millions of people who do not use banks to hold their money, it would be tough for them to acquire a fast payday loan. A storefront service will expect a signed check to hold for payment on due date. An online service uses bank transfers and debits to process their loans. How would anyone without a bank account get fast cash? The post office believes they have an answer to service customers who use short-term loans or have no bank account.

The USPS will offer ‘Postal Loans’ to help people save money on fees. This doesn’t mean that there are no fees attached, but the postal service does believe that it would be better than what folks pay into payday lender companies and cash check services. It’s one more option for those who need a money boost.

As it stands, people who do not have a bank account but do work for a living need to cash their checks somewhere. Cash checking services are done with a fee and some places even offer a savings type account to hold money instead of carrying it around with you. It’s a safe way to protect your earnings but none of it is free. The USPS would like to offer a prepaid card to consumers who have their paycheck directly deposited onto that card. A postal loan would be limited to half the amount deposited onto that card. What about the fees? How will the USPS get paid for their service? Payday loan lenders make their fees known upfront. The service has been around long enough that most people at least have a basic understanding of how it all works.

Every person who takes out a postal loan would have to pay 5% until that loan is paid off. It sounds very reasonable and the idea of the loan would help many people save lots of money on finance charges. The trouble lies with the inability to make good on the loan. Payday lenders fight that fight every day. There is no direct access to a person’s paycheck, only the ability to collect by debiting their account. If the money is not in a bank account, a direct lender will have to continue to try, add more fees and work something out with the borrower that both parties can agree upon. The USPS will have access to a person’s full paycheck. If the loan is not paid as contracted, the USPS can automatically withhold the payment from the direct deposited paycheck and place whatever is remaining of their paycheck onto the card. Borrowers will pay no matter what without a chance to work something out.

Banks and credit unions offer similar services as well. Their rates are lower than typical direct lenders and people tend to trust the institutions more. The idea of alternative options is wonderful. Let the people decide. It is interesting to point out that three major banks have already decided to pull out of their payday loan offers. The hassles accompanied by them from regulatory problems to customer complaints and payment troubles are more than they bargained for. It seems that people still run into trouble and with first access to paychecks with the ability to collect, borrowers continue to have trouble. Consumers lose control over their paycheck. When a borrower used a payday loan service, they keep the control with a higher finance charge.

Money management is ultimately up to each borrower. They will need to use a service which will work best for them. The postal loan, once it becomes active, will help those customers without a bank account. The actual postal loan is yet to be determined as far as how borrowers will review the services.

Payday Loans – Second Chance Payday Loans

Mistakes are a common factor of life. Without mistakes we wouldn’t be able to improve ourselves. Many believe that great success derives from a previous mistake. Isn’t it important that you and your family receive the second chance you deserve?

Many Payday Loan providers believe that you deserve a second chance at a short-term loan. A chance to prove to yourself, and others, that you can make the right financial decisions and improve your quality of living. A chance to persevere and efficiently manage your finances from home. Second Chance Payday Loans were designed with you mind!

What is a Payday Loan?
A Payday Loan is a fiscal sum awarded to you by a respected lender between paychecks. They are typically cashed in sums ranging from $100 to $1500. Be sure to remember that Payday Loans are of a short-term nature. With that in mind, they are to be repaid upon the receipt of your next paycheck.

Unexpected expenses and emergency situations are harsh realities that thousands of hard-working adults must deal with each day. If you have bad credit or no credit a long-term loan may be out of the question. That being said, if you need short-term financial aid a Payday Loan is on your side. The fiscal sum provided to you will not only reduce financial stress now, but in the future as well.

Is it possible to get a Second Chance on a Payday Loan?
A Payday Loan is a fiscal sum awarded to you between paychecks. Remember, providers are looking to provide you with a second chance at successful financial management. With a Payday Loan you also reduce the stress and hassle of filing several documents! It’s important to remember that most companies do not take credit checks, so applying to multiple companies will not negatively affect your credit score! For a great list of no credit check payday loans, visit a payday loan review website.

Where can I apply for a loan?
You can now find hundreds of Second Chance providers online! That’s right, you don’t have to leave the convenience of your own home to take out your short-term loan. With a few clicks of the mouse, you could be filling out your online application. Said application should take no more than ten to fifteen minutes if you are prepared. Be sure to equip yourself with your Social Security Number, Driver’s License and employment background before beginning your application.

How and when do I repay my Payday Loan?
Although you are not required to post collateral, you are required to repay your loan on time. By taking out a Second Chance Payday Loan you are agreeing to repay your short-term loan upon the receipt of your next paycheck. It is important to borrow responsibly; don’t borrow more than you can afford to return on payday.

Upon completing your online application you will be presented with a number of repayment options. Be sure to carefully consider each option and make a selection that is right for you. You should look to select a quick and simple repayment option, you don’t want to get bogged down with complex details.

Don’t you deserve a second chance? Are you ready to take responsibility for your family’s financial management? Isn’t it time you make a change? Stop wasting time and do something that could change the rest of your life.

You’ve taken the first step, you have the knowledge and wisdom you need. Now it’s time you take action and put your first foot forward. Do what’s right for you and your family, make the intelligent move and obtain your Payday Loan today!

“By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.”
~ Confucius