Here is a short guide for the potential payday loan borrower. The application is very simple and takes little time.
Step 1. Browse Lenders
If you have never dealt with payday loans, you might be confused at the beginning.
In fact, there are two ways to get a payday loan. The best option for those who prefer personal contact with a lender is to look for a local company and Google Maps, Yelp.com or Yellow Pages is the place to start from. However, those who prefer to solve their problems promptly and interactively choose online lenders as a more appropriate option. The reason is that nowadays almost all financial transactions are electronic-based and can be carried out online as this is faster and more convenient. Besides, browsing lenders online is more beneficial as it gives a clear idea of the lending market and the offered services.
Step 2. Basic Requirements
In order to qualify for a payday loan, a person should meet certain requirements. Even though payday lenders do not perform any credit checks, they are likely to ask you for the proof of your identity, employment and income. Therefore, all the necessary information should be at hand.
Step 3. Application
As it has been aforementioned, an application can be made either online or personally. In some cases, lenders accept applications by fax and by phone. With a land-based lender, the application is filled in the office.
It is required by the majority of lenders that a person should have a valid checking account; otherwise, the money transfer will be complicated. However, there are some lenders who are ready to work with a savings account as well and other options.
Step 4. Agreement S
If the application is done online, the signing procedure is also done online.
In case it is done in person, a borrower signs a contract. According to the existing legislation, payday lenders must disclose the terms and conditions of repayment to a borrower before the agreement is signed (according to the federal Truth in Lending Act.)
It is very important that a borrower should read the document carefully before signing it. It is necessary to pay attention to every point (especially the one concerning interest rates and any possible financial charges) in order not to be unpleasantly surprised on the day of repayment.
Step 5. Wait for Approval
Approval of a payday loan takes very little time and this is one of the advantages of such lending. A person is generally contacted in a matter of hours and notified about the decision.
Payday loan companies can carry out credit checks if they find it necessary for the case; the lending decision is made by a loan company solely. However, customers with not perfect credit have more chances to be approved for short term small cash loans provided by payday lenders than while applying for a credit from a traditional credit institution.
A lending company only verifies the information about a borrower by checking his or her ID, driving license and income and employment information (the latter is generally obtained from the last employment pay stub of a person). The amount of a loan can depend on a person’s income and general approval on the basis of the potential personal ability to repay.
However, the approval rate in payday lending is very high and this is a great option for borrowers with bad credit.
Step 6. Getting Cash
After the approval is got, the cash is transferred electronically to a person’s bank account where he or she can withdraw it from at once. The whole process basically takes not more than 24 hours.
The concept of payday loans is to provide a person with cash as fast as possible. Payday loans are meant for emergency situations when it is essential for the money to be provided fast. So far, this is the fastest service in the sphere of lending.
In case of any fraudulent actions from the side of a lending company can apply for the assistance of the Federal Trade Commission. It also deals with unfair business operations and usury as well as protects consumers’ rights. To file a complaint go to Federal Complaint Assistant.