Any number of events can cause the household expenses to overrun the monthly budget. Certain situations require immediate cash to avoid additional costs that could create a serious financial shortfall in the near term. An unpaid bill can impose a significant late fee. Car repairs must be paid for when the vehicle is picked up. Paying for car repairs cannot wait because the vehicle is essential for going to work. Last minute travel for a family emergency can be expensive. A payday loan can cover one, or more, of these situations. Many people assume that a poor credit score would prevent approval of online payday loans.
With a traditional loan, the lender would use a number of factors, including the credit score, to determine the risk associated with approving the loan. The payday loan is evaluated with a different set of criteria. Anyone has the following attributes can qualify for a payday loan.
• 18 years of age, or older
• Valid form of state-issued ID
• Steady employment
• Checking account, in good standing
The lender wants to know that on the loan due date that sufficient funds will be present in the checking account. A credit score is not necessary for the lender to know if the borrower has a high enough monthly income to repay the loan. Most online payday loans are approved for any amount between $100 and $1,500. After the application is completed, multiple lenders will receive the information about the borrower. An interested lender will respond directly to the borrower and complete the approval process. First time payday loan borrowers are surprised when the loan is approved quickly, and the funds arrive in the checking account within one business day.
Rapid approval is the most important facet for the payday loan borrower. Emergency cash makes all the difference when a surprise expense arises. Fast repayment of the loan will be the first step toward building a rapport with the lender. Future online payday loans are easier to acquire when the borrower is reliable and upholds the agreement. All payday loan borrowers must realize the challenges that will be presented by mishandling a payday loan.
• Sustained financial shortfalls in the near term
• Defaults on payments in other areas
• Inability to repay the payday loan
A payday loan must be repaid in full on the agreed upon date. The advantages offered by a payday loan include the fact that the debt is repaid in full on the due date. The borrower will not carry debt for a number of months. Household expenses will be back under control in a matter of weeks.
All potential payday loan borrowers must adjust the household budget to begin to build a cash reserve. Repetitive use of the payday loan option is an indicator that a better solution is needed to manage the household income and monthly expenditures.