How to get the Money You Need Before Your Next Paycheck
Even though they have not been called payday loans for long, this type of borrowing service has been around for a long time. Many people use to issue what they simply called a short-term loan. This idea of lending money for short term usage has been around for thousands of years. The thing that is not clear is when these stores got their start in the United States. These services caught fire in the Nation during the 1990s. They went under the name of check cashing services. The people loved it then for the same reasons they love it now. This is because you get cash as you walk out the door or are approved by an online lender.
The internet has helped boost many companies throughout the years. Lending companies have also benefited from this. Providers all over the globe have taken recently taken their service to the internet which only adds to the convenience. Long gone are the days where you actually had to go into the store to get the relief you need. Now you can just sit at your computer and request funding. The internet has truly assured that the industry will be around for years to come. The services offered have truly become the most convenient way that you can get the money you need today.
How Easy is it to Get One?
One thing that people tend to wonder quite a bit is whether or not these products are very easy to qualify for. This is a question that people ask because many of them have had troubles in the past when it has come to getting other offerings. This is why people question how easy it is to get short-term financial relief because they really do not want to go through the same amount of hassle. Do not let questions hold you back from getting the assistance you deserve. Get to know how easy it is to request funds in order to find out whether or not this is the right decision for you.
Well, the answer to your question is yes, they are very easy for you to get if you so desire. These are both quick to get and easy to get, so hopefully that puts any fear you had aside. You do not have to worry about a long over drawn application process that takes a few weeks to handle. This would not be very productive if you were in the position of requiring financing as soon as possible. You just have to meet a few chosen criteria.
A Closer Look at the Requirements in Order to Qualify
Are you a U.S. citizen? If you are then you have just completed the very first step of eligibility. Next thing you need to make sure is that you are 18 years old. This is the youngest age allowed by law to obtain some sort of unsecured loan if the need be. Finally you must make sure that you make at least $1000 per month of income. This is to ensure that you are able to pay back your approved balance plus applicable fees on time when it is required. If you meet all three of standards then you can now be confident in your ability to obtain financing.
- You must be employed or receive regular income from a program such as social security or welfare
- If employed, you must make at least $1000 per month or $800 if you receive income through a government program
- You must be 18 years old as well as a citizen of the United States
- You must have an active savings or checking account that allows for direct deposit
I Have Bad Credit, Can I Still Get Approved?
With the ongoing financial instability in the United States, more and more people are looking for other ways to borrow the funds they require. Payday loans are an increasingly popular option for many consumers, but some wonder if they have the credit score necessary to get approved. Guess what? No matter what your score is, it's good enough to get approved for advance funds right now! That's because unlike almost every other type of financial option out there, unsecured lenders do not use scores as a determinant for approval. You can have a rocky financial history, great credit, or none at all and still easily get the money you need. What's the catch you ask? Believe it or not, there really isn't one! Of course, there are some other requirements you must meet in order to get approved, but this industry has always been about ease of use and the approval standards definitely reflect that.
Ditch the Fax Machine
When you want money delivered quickly before your next paycheck, the ability to dodge the fax machine is a great benefit. You simply complete an online application using our secure website and submit it without having to gather and fax documents or paperwork. Highly encrypted technology protects and safeguards your sensitive personal information and, unlike brick-and-mortar stores, no one will know about the transaction except you.
Will My Employer be Contacted At All?
Your finances are a very private matter. Many people find they are embarrassed by their need for more funds. This is generally something they do not want to call attention to in the workplace. Generally, lenders will not contact your employer. This is because they know that their industry is very sensitive. But they still have to know if you will be able to pay them back. Instead of contacting your employer then they will probably ask you to bring in a paycheck stub in order to verify that you do have money coming in. If you have issues with your paycheck stub then the provider may contact your employer just to verify that you do have a job and there are no major issues.
You also run the risk of them contacting your employer if you fail to pay back what you owe. If your amount owed gets taken to collections then they will try to contact you anyway possible. This can often mean contacting your employer. Just another reason why you have to pay back your debt as quickly as possible. They will never contact your employer for any minor reason. If they are contacting your employer then they do have a valid reason. How can you stop them? Well, first thing you can do is write them a letter. Ask them to cease and then tell them how you are going to play them back. When you do this then, by law, they must stop contacting you and your employer. This will help you pay back your balance plus applicable fees without much hassle.
But remember, if they do contact your employer it is probably just to verify they you do have a job and there are no troubles. In this case they would probably not even reveal that this is for a payday loan. The main way you can prevent them from contact your employer is by paying back the amount you owe quickly. So make the extra effort and everything will turn out good with the transaction.
All About Interest Rates and Fees
One thing that can really turn a potentially good borrowing situation into a poor one is the interest rate. In some cases a rate may be so high that you have trouble with repayment solely because of the additional charges on top of the approved initial amount. That is why it is so important that you find an option with a rate that you can handle. How do interest rates work on when borrowing? This is really something you should know in order to effectively apply for and receive advanced funding.
It is important to know that every lending product will have extra fees and charges attached, and there is no way around it. You might have heard advertisements on television for no-interest loans, but that does not apply to short-term borrowing. These fees are how the company will make their revenue. If they did not charge anything on top, they would just be giving you free money, and there would be nothing in it for the company.
Comparison Shop to get the Best Deal
Each company has different associated costs. This is something you need to know before you begin the application process. Generally you can expect that you will pay 15% in interest. That is about the normal rate. For every $100 you request, expect to pay $15 extra back. This can start to add up quickly. If you do not pay back your balance right away then you could even expect your interest payments to double, thus making it even harder to pay back.
One of the main reasons that short-term lending options have higher rates than other, more traditional counterparts is because of the service they provide. They give you cash right on the spot. There are no payment plans either. So they are trusting you with a big responsibility. The company really wants to make sure that you pay the balance back on time. That is why the rate is so high. It may seem unfair, but they are giving you money on the spot.
If you are having trouble paying your bills, and since you can't stop lenders from charging you fees, you should learn how to manage them. If you apply for advanced funding, make sure you can pay it back when it is due. If you have to extend the length of the agreement you will be charged more and you could fall into the trap of always having to renew your loans because you cannot come up with the cash to pay them back.
These types of offerings do not require credit checks, so anybody with a job can get one. That is another reason why the extra costs might be so high. They do not want to lend out their money to complete strangers without getting something in return. If you have bad credit you would probably end up paying a similar rate for another option. But that scenario would not give you money right then like a cash advance does. Short-term lending services come with many great benefits, so it kind of negates that negative interest rate. Because like we asked earlier, where else are you going to find an option as convenient as these? Money on the spot rarely comes around.
When payday loans were first introduced to the country in the late seventies, they were hailed by many as an opportunity to help the struggling poor who lived paycheck to paycheck and had trouble making ends meet. The business model proved a wild success and in short order, into the eighties, brick-and-mortar lending stores began springing up in neighborhoods across the country. Soon, however, a downside to the industry came to light (and under attack) as it was shown that the fees charged by providers are extremely high when calculated out against a traditional APR (annual percentage rate) secured option. In response to the mounting criticism, the Congress of the United States began to look at options that could control the fees associated with short-term lending services and they were met immediately by resistance by the states who insisted that the control of providers was something that was within the purview of the states alone and not for the federal government to manage. The federal government backed off under the pressure and now the matter is almost entirely left to the states.
Consumer Protections Make These Loans Safe
All providers are regulated by the state they do business in and some of the rules they will have to follow will vary depending on the state. However, the general consumer protection laws the companies have to follow are pretty much the same in every state. Companies are not allowed to offer more than one loan to a customer at a time. Some states may allow two however there is a limit on how many advances a customer can have at one time. Once the customer has paid off an existing balance they can apply for another one if they choose.
Consumers are also allowed a certain amount of time to cancel the agreement. The normal cancellation period is about 2 days. If within these 2 days the customer decides that they no longer want the service they can opt out of the contract and return the balance amount (minus the interest fees in some situations). Providers must also make it clear the terms of the contract. This means the provider must deliver a contract to the customer with terms the customer can understand and must also explain the contract in full to the customer. The customer must then agree to the terms of the contract and sign it before the funds can be dispersed. Along with explaining the terms of the contract, the provider must be sure the customer understands the amount of money they are receiving, the amount they will owe and when that amount is due. Alongside all of this, lenders must have a visible license where the customer can see it clearly and everything that it entails.
Am I Able to Consolidate My Loans?
Perhaps you have fallen victim to the dreaded debt trap. Perhaps you have taken out multiple advances with multiple companies in order to cover all the current costs you have. It may be hard for you to follow whom your payments go to, for how much and how often you have to make them. Consolidation makes things very simple for you. They will pay off all your balances. They will figure out where your payments go, when they are paid and how much needs to be paid. In turn all you have to do is pay the debt consolidation company one easy payment every month.
Even though these services are short-term agreements, they still fall under the category of services that will be consolidated by the providers. Consolidation can help you fight your way out of the debt trap. By paying off all your balances for you and allowing you to pay a stable monthly payment each month, you do not have to worry about all your balances becoming due at once and paying the very high fees that come with multiple lending services. Debt consolidation may be your only way out of trouble.
Consolidating your amount owed can also have a positive impact on your credit score. Since you currently have a lot of debt, which is why you require debt consolidation, your income to debt ratio is probably not very good. A bad income to debt ratio causes your credit rating to go down. But since consolidating your balances can help you pay off your debt in a timely manner, you will be able to pay off your debt and your score should increase over time.
How Cash Advances Differ From Pawnbrokers
A pawnbroker, a term usually used synonymously with pawnshop, is a person or business that offers cash either in the form of secured lending services or as payment for the sale of personal property. For people who are interested in trading goods rather than receiving monetary compensation, these stores also allow customers to exchange personal property for store credit. To receive cash from one of these businesses, a consumer has two options. First, he or she may present an item of some retail value to sell. The pawnbroker assesses the item's condition and saleability and then, if the pawnbroker wants the item, he or she makes the seller an offer. Alternatively, if they have the proper license, pawnbrokers can also offer secured borrowing options that use a piece of the consumer's property as collateral. The broker still charges a fee on these services and retains ownership of the property until the amount owed is repaid in full.
Common items used for collateral include car titles, electronics, jewelry, musical instruments, etc. As an example, say a borrower brought in a guitar worth $4,000 with the desire to obtain a secured cash advance. These stores typically egregiously undervalue the items their customers present, so the broker estimates the guitar's resale value to be $2,000. Brokers usually do not lend more than 20%-50% of the collateral item's value in cash, so the broker agrees to give you $1,000 in cash for six months with an interest rate of 10% per month. At the end of the six months, you will have to repay the broker $1,600 in order to reclaim possession of the guitar, assuming you are able to come up with the funds. In other words, you will have paid $600 just to get $1,000 in advance.
- Unlike unsecured loans, you must present an item of personal property, or collateral. You risk losing this item if you cannot repay the amount owed.
- Pawnbrokers provide extremely low valuations for collateral.
- You will not be able to borrow more than 25%-50% of the value the broker declares your item to have.
- The charges associated with these types of lending services are still high, despite the fact that the agreement is secured by property.
- If you pawn an item, the business will give you a receipt that proves that you own the goods you pawned. If you happen to lose this receipt, you may not be able to retrieve your collateral without extreme difficulty.
In general, when you request funds, you pay a set amount of interest for the amount of money that you borrow. At a pawn shop, not only do you need to pay the interest on the item that you are pawning, but you might also be charged additional fees. These fees are often necessary to pay for someone to appraise your item, submit the information about your item to the police database, and store your item. Some cities are also imposing additional fees for each individual transaction to help pay for the police resources that they use when they deal with these stores. When you deal with a payday lender, you don't have to pay for any of these fees.
To Borrow or Not to Borrow: The Debate
If you are considering a cash advance, you should first think about any viable alternatives. These options are generally only recommended as a last resort, after you've exhausted all other options available to you. You might be surprised to learn that there are actually quite a few alternatives in the market, and you should consider all of them before you take out a high-interest option. Below you will find a list of the most viable alternatives to short-term lending services.
- Create a budget. Usually, people who find themselves in need of regular financial assistance do not budget at all. They don't keep track of their spending, and they don't put any limits on their expenses. This is dangerous because, if you don't know where your money is going, chances are you will outspend what you earn quite easily. Making a budget will help you identify areas of overspending where you can cut back to save enough to avoid borrowing altogether.
- Research credit cards for people with financial challenges. Some consumers just assume that because they have less-than-perfect financial histories, credit cards are not an option available to them. In reality, there are actually an abundance of options available to people with financial blemishes. Even people with bankruptcies in their past can usually obtain some type of card, though it probably comes with higher fees and rates than other cards. To find the best card for people with blemishes, shop around online and compare APRs.
- Communicate with your providers. They are sometimes more flexible than consumers think they are. If you are open about your fiscal shortage in advance of when your bills are due, you have a good chance that they will understand and try to work out a payment plan. Of course, they will charge you some sort of fee for this convenience, but it will probably still be cheaper than short-term borrowing. When you contact your providers, emphasize that your cash flow issue is only temporary, and they might be more accommodating.
- Appeal to your employer for assistance. Your employer might be willing to give you an advance on your paycheck at no charge if you ask. You might also try requesting funds in advance from a local bank or credit union. Don't forget to ask family or friends for the money as well. Typically, applicants only need a small amount of money for a short time, and your friends and relatives might be willing to help out under these circumstances.
- Take out a cash advance on a credit card. If you have a card with a cash advance option, you should compare the rates and terms of that kind of service with a payday loan. The rates might be higher or lower, depending on the terms of your card.
I Recently Took Out a Payday Loan, But Money's Still Tight.
If you've ever had to borrow to make it until your next paycheck, you know it can sometimes be difficult to get yourself back on track. By seeking financial assistance in the first place, you're probably not in the best place financially. It happens to everyone at some point, whether it's a car repair or a trip to the dentist, we've all dealt with being unprepared for some sudden expenses. That's one of the reasons these services have become so popular, they get you the relief you desire almost immediately, in cash no less. Unfortunately, the need for your first advance can often linger and require you to take out a second one. They are meant to be a convenient way to take care of a quick expense, not down spiral into debt. In order to avoid the need for a second one, you may have to reevaluate your finances and change some habits. By following some helpful tips, you'll see how you can avoid the tendency to take out another one.
Tips to Avoid Getting Into a Cycle:
- Budget your finances: This is probably the best way to avoid needing another loan. Your first step should be determining your monthly income and monthly expenses. Find out how exactly how much spare funds you have each month. Obviously allow for some spending money but try putting somewhere between a fourth to half of that money away in savings, that way you'll have it next time an emergency pops up.
- Make sure you are borrowing only what you need (as opposed to what you want), many companies will let you borrow in very specific increments.
- If you have any items of financial value that you're willing to part with, you could consider selling them. You can sell an item on eBay and have your money within a week. You could also sell items to a local pawn shop, and even buy them back if you get back on your feet quickly.
- Cut coupons and shop thriftily, purchasing food from a store and making your own meals is about half as expensive as eating at a restaurant.
- Once you've taken care of your immediate expenses with your advance funds, you could do a couple days of temp work. These companies usually let you work for several days and can pay you the same week, or even day.
- Check out some credit cards, certain providers may even offer an introductory period of little to no interest.
- While some people may be very hesitant to ask a family member for money, it may save you from requiring more advance funds.
- If you have serious debt issues, consider a debt consolidation program. Debt consolidation companies combine all of your debt to one monthly bill and can often get you lower monthly payments and lower interest rates.