A Payday loan is an option for receiving money in a short notice in case of emergency money requirements. People with or without a credit and even those with a bad credit can apply for a payday loan, but there are other requirements as well. Anyone above 18 years of age can apply by filling out a form offline or online.
Filling out the application form is the very first step. It requires you to be above 18 and a citizen of the respective country. Getting approval for payday loans is easier than to get approvals for traditional loans. Those with bad credit histories, who are struggling and are working on improving their records, can look to payday loans in times of need.
Most companies do not require anything but the basic qualification to lend a payday loan. Some may have regulations on the usage of the loans. All you need is to fulfill the basic qualifications and then you can use the loan amount in any manner you deem fit. You can use the amount for activities like rent clearance, mortgage bills, repair of your vehicle, furniture shopping, or even to buy birthday gifts for someone.
Paying back payday loans is also quite convenient. You can make payments in small amount installments whenever you get your salary. A few payday loan companies allow a grace period of a month before the payments are to be made. Different companies have different specifications on the grace period for this loan. Hence, you must thoroughly understand all clauses and information regarding grace period that is a part of the contract.
The interest charges are also very significant. You must look into them and understand them well before taking up a payday loan. Although payday loans are made available even to those who might not be eligible to traditional loans, they come with much higher interest rates as compared to most traditional loans. They can vary between ten percent and one hundred percent, and can even go higher than that. A few regions and states in some countries have restrictions to the amount on which interest rate is applicable for payday loans by a company. Although the interest rates are significantly higher, some people have no choice as they cannot avail of other loans. This is their only emergency cash option. If you manage to pay back the loan before the period agreed on in the contract, there might be a lowering of the interest rates by a few companies.
Payday loans are a good option if you wish to borrow small amounts of money for a short term period. In such a case, you must apply for a payday loan as a personal loan might not benefit you too much. These traditional and personal loans are long term loans for huge amounts that are to be repaid over months or years. If you require borrowing a small amount of money that you can repay soon, then applying for payday loans is a good option.