What You Should Know About Payday Loans
When you are in a financial bind, payday loans can be a really nice thing to have
. There are more and more companies offering online lending services and more and more people are trying payday loans.
So what are they? They have many names like, cash advances, quick cash loans, and payday advances, to name a few.
These are short term loans whose term is only about two weeks. When the end of that term comes the loan must be paid in full by the borrower.
Payday loans are very, very different from an employee's cash advance and a cash advance on a credit card. When you get an advance from your paycheck, the money is just subtracted from said paycheck.
Depending on the company's policies, some employees can ask for partial, or full, advances but only for a certain amount of times. There are no added charges or salary deductions to the employee's pay if the employee should ask for a cash advance.
When you take an advance from your credit card, it is a prearranged line of credit issued by the credit card company. On a technical note, the term "cash advance" does not really apply here since the card holder's company pay is often not taken into consideration or deducted from.
What is important to the lending company is the credit history and credit rating of the card holder.
The term, payday loan, means you get a loan to be paid upon your acceptance of your next paycheck. Payday lenders are very fast and the process very rewarding.
If the borrower can provide all the necessary documentations in the shortest time possible, and can very easily write out a post-dated check for the benefit of the lending company, all loan processing should be fast and immediate. Unfortunately, this is not often the case.
Some people simply have a harder time completing the necessary paperwork, and this is the main reason why many loans take longer to get approved, or (in a few cases) get rejected altogether. Some of the necessary papers include: personal or identification documents, recent pay stubs, bank statements, etc.
What's the difference between online based lenders and retail lenders? When it comes to payday loans, there really is not much difference between online lenders and retail lenders. However, for clarification purposes, we will define both.
Online based payday lenders, as the word suggest, operates over the World Wide Web. Any person can access the services of such lender by simply visiting specific websites and filling out the online forms.
These forms, however, can not be processed online. Usually, the online lender would require the borrower to fax the completed forms along with all the necessary documentations like bank statements and personal documentations.
Retail payday lenders are those that operate outside the virtual world. These lenders have shops that can exist in your town, and people have to personally go to one of these to ask for a loan.
Different retail lenders have varying policies just as online lenders do. When choosing any lender, it is advisable that you research the lenders you are considering.
You will want to find out if their corporate office is located within your country and if they have had any complaints with the BBB.
It is also recommended that you research the laws in your state to find out if the lender is charging you within legal limits. Once some research is done, you can feel confident in your choice of lender.
The process runs pretty smoothly, but as a last piece of advice, make sure you read all the fine print!
by: Jack Landry
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