Common Questions about Payday Loans

Written by admin on April 4th, 2011

Payday loans are a beneficial means in which to get quick cash when your paycheck can’t come soon enough.

Most of us have been in a situation where our weekly paycheck didn’t last as long as expected. Payday loans are a great way to get extra cash to make ends meet between paychecks. They are, however, often misunderstood.

The following is a list of questions commonly asked regarding payday loans:

Q: What is a payday loan?

A: A payday loan is a short-term loan that is taken out against a future paycheck. In other words, your ability to repay the loan is based on your next paycheck.

A payday loan, which is usually a small loan (less than ,000), is generally used to cover short-term expenses until the borrower’s next payday.

Q: What is the general time period for a payday loan?

A: Most payday loans must be paid within 14 days of the loan, sometimes less, depending on the amount of the payday loan and the company through which you obtain the loan. Payday loan interest is usually calculated every day; therefore, it is in the borrower’s best interest to repay the loan as soon as possible.

Q: What are the requirements for a payday loan?

A: Although requirements vary between payday loan companies, most companies require that the borrow be at least 18 years old, have a checking account in good standing, be employed full time, and earn a minimum amount of money each month.

Q: How long does it take to apply for a payday loan?

A: Thanks to the conveniences of the Internet, most payday loan applications can be filled out and sent online in a matter of minutes. Income verification, residency verification and checking account verification can also be completed quickly, thereby enabling loan payments to quickly be issued.

Q: How quickly does it take to get my money from a payday loan?

A: Many payday loan companies can deposit your payday loan money in a matter of hours. Most payday loan companies, however, are typically able to process a payday loan in about one business day. Money from payday loans are received almost immediately after the loan is issued, as most payday lenders use direct deposit into the borrower’s active checking or savings account.

Q: Do I need to have good credit to receive a payday loan?

A: Payday loans are generally popular because they enable consumers to receive a short-term loan, regardless of their credit history. Payday loans often come into play when consumers are not able – or simply do not want to – use credit cards or other types of personal loans.

Q: Why are the fees so high for payday loans?

A: Payday loans have often been portrayed as irresponsible loans. However, when given the cost of bounced check fees, overdraft fees and credit card interest, the fees for payday loans are actually quite reasonable. It is important, however, to always research the payday loan company and their related fees before applying for a payday loan.

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