You may have thought about getting a payday loan or cash advance to help you get through a hard time or pay for an unexpected medical bill or car repair. Payday loans can be gotten quickly, sometimes the same day they are asked for, and can sometimes save your life. Before you apply, you need to know what to expect.
First, look around for the company whose terms and conditions are the best. Don't worry if your credit is bad or you don't have any. People who have had money problems in the past can find companies that work with them on fair terms. You will probably need to show proof of your income. Be ready to fax the lender information if they ask for it. Most will ask for information to be faxed, but some lenders say they don't need faxes. Almost any loan, including payday loans and cash advances, requires that you have a steady source of income.
If you think you'll be confused by the small print, just remember a few general rules. Some companies will charge you a fee if you pay off the loan early. If you don't know about the penalty, you might have to pay more than you planned. Try to stick with companies that say they don't charge a fee if you pay off your loan early. If you have good credit, you can probably get a traditional loan from your bank with a lower annual percentage rate. But most of the time, it takes much longer to get your money. A payday loan or cash advance might be right for you if you need money quickly and think you can pay it back quickly.
If you pay back your loan on time, it can help your credit score. If you get a payday loan that lets you pay another loan or credit card bill on time, you could avoid a late fee or a fee for a bad check that would have cost more than the interest you paid on the payday loan. Also, paying your credit card bill late hurts your credit rating even more. Just make sure you don't take out more money than you can pay back. Most of the money payday lenders make comes from people who can't pay back their loans on time. If you're responsible, a payday loan could really help you get out of a tight spot.
Some companies may want you to send them a check ahead of time. Let's say you want to borrow $500 from someone. They may ask you to send them a check for $600 with a future date, which they will cash when you get paid next. Other businesses will only check to see if you have a bank account. Then, you can pay back the loan whenever you want. This can be helpful if there is no fee for paying off the loan early and you don't want to pay more interest than you have to. You can use the payday loan system to your advantage if you choose carefully, ask questions, and find out as much as you can before you borrow.
