Those who have never taken out a payday loan before will find that doing so isn’t particularly difficult. It is, however, important that you have a full understanding of how these loans work. This way you will be able to navigate the process of getting the money you need as easily as possible. You don’t want to fill out a single application until you know precisely what to expect. This information can help you stabilize your financial situation when you are having serious problems.
The application process for a payday loan is done entirely online. You will fill out the application on the lender’s official website.
A standard payday loan application is broken down into three sections:
- Personal information: The first part of the application will most likely require you to submit your full name, phone number, email, address, and social security number. This is very standard when applying for any type of loan.
- Employment information: Next you will need to submit information pertaining to your job. The required fields in this section usually include company name, job title, net monthly income, and how often you get paid. These details will help the lender figure out if you can afford to pay back your loan on time.
- Financial information: You will also be required to submit other financial information with regards to your bank account. This includes your account number, routing number, and account type. Most of these lenders allow you to opt for direct deposit, which his recommended.
Getting a Response from the Lender
One of the incredible things about payday loans is that it doesn’t typically take very long to get a response from the lender after you submit the application. You shouldn’t have to wait more than a couple of hours.
You will be notified either by email or phone as to whether or not your application was approved. If it was approved, you will be sent an offer, which you may accept or turn down. This offer will contain all of the pertinent details of your loan, including the total amount you will have to pay back.
It is absolutely crucial that you read through the offer you get from the lender so you’ll know exactly what it says. You don’t want to have any major regrets later on because you chose not to read the fine print.
Accept the Offer and get Your Money
Once you accept the lender’s offer, you will get the total amount that you requested in your loan application. If you have chosen the direct deposit option, the money will be electronically transferred right into your bank account. If you did not opt for direct deposit, you will most likely be sent a check in the mail.
It usually takes a few hours at the most for someone to get their funds once they accept a payday loan offer. This is just one of the main reasons why this type of loan is so great for people who need cash as quickly as possible.
You will be able to spend the money you get from the lender however you see fit. At no point will you ever be asked any questions about what you intend on doing with the funds. This is just one less thing you will need to worry about, which is always good.
Paying Back the Loan
The standard payday loan must be paid back within two weeks of receiving the funds. The whole point of this is to pay it back with your next paycheck from work. There are other lenders that offer longer payback periods though.
The general rule with payday loans is that the more money you borrow, the more time you will have to pay it all back. In fact, you could get up to a month to pay back everything you have borrowed.
If you pay back your payday loan on time and without any issues, your credit might actually improve. This is not true with all payday lenders, so you will need to keep that in mind. The fact is that some of these lenders do not report payments to any credit agencies. You will therefore want to make a point of finding one that does this, as it can benefit you tremendously.
Payday loans are far from complicated, but that doesn’t mean you shouldn’t familiarize yourself with the process before getting started. When you know what to expect before doing this, you will increase your chances of a positive overall borrowing experience. Knowledge truly is power, especially when it comes to matters of finance. Remember to find a trustworthy lender that will enable you to get an excellent deal on your loan as a whole.