- What is a payday loan?
- Is a payday loan a good solution for me?
- Why are payday loans useful?
- How and where can I get a payday loan?
- What are some payday loan requirements?
- How soon can I get a payday loan?
- Do I need to be employed to apply for a payday loan?
- What is the difference between direct lenders and affiliate lenders?
- How much money can I borrow?
- When do I need to repay the loan?
- Can I repay the loan before due date?
- What if I can’t repay the loan on time?
- Can I refinance my payday loan?
- Do lenders check credit rating?
- What are the downsides of payday loans?
- Is my personal information safe?
- Will I need a fax machine to apply for a payday loan?
? What is a payday loan?
A payday loan, also sometimes referred to as payday advance or cash advance loan, is one of the most common types of loans. It’s the type of loan that helps you take care of your immediate financial needs and expenses without having to pay late fees for your credit card or use your overdraft protection with your bank. The money is borrowed against your next paycheck, which means you are supposed to pay back the loan on your next payday.
? Is a payday loan a good solution for me?
This, of course, depends on a number of your personal financial factors, but in general, whether it will work for you depends on what you want to use it for. Payday loans are generally used for short-term expenses, usually unexpected ones, like emergencies, debts that need to be paid off immediately, or for buying furniture, equipment, paying for a vacation and so on. Payday loans are not a good solution for long-term financing.
? Why are payday loans useful?
One of the best things about payday loans is that they need to be paid back by the time you receive your next paycheck, so you will only borrow the amount of money that you know you can pay back when the time comes. This prevents the accumulation of debt and as such is a much safer solution. They are also useful for covering sudden, unexpected but not too expensive costs. Again, lower amounts of money borrowed prevent you from getting into too big a debt.
? How and where can I get a payday loan?
There is a number of companies that either offer several different kinds of loans or specialize in payday loans alone. Some of these companies work online as well so you don’t even have to leave your house in order to get a loan. In addition to using online payday loan companies, you can also visit one of the payday loan stores. There are thousands of these stores across the country, so finding one shouldn’t be a problem.
? What are some payday loan requirements?
This depends both on state regulations and on the loan company of your choice. However, most loan companies require you to be at least 18 years of age, to be able to show concrete proof of income and sometimes proof of employment, and you will have to have an open and active checking account. You will also be asked to show a valid personal ID and some companies will ask for an active phone number and/or e-mail address. In addition to these general requirements, some companies may also look into your credit rating, but this is very rare.
? How soon can I get a payday loan?
Payday loans are usually approved very quickly and you receive your money in a day or two. If you go to a payday loan store, you will probably receive the money as soon as you are approved, which means immediately. If you use an online loan company, the money will be on your bank account anywhere from 24 to 48 business hours.
? Do I need to be employed to apply for a payday loan?
While not all payday loan companies specify that you need to be employed in order to use their services, their requirements normally include having a steady source of income. Moreover, they often require that you provide proof of income in order to qualify for a loan.
↑ Back to Index
? What is the difference between direct lenders and affiliate lenders?
Direct lenders are those lenders that provide loans without the participation of a third party – they are the ones providing the money and determining loan terms, taking into consideration the laws of the states where they operate.
Affiliate lenders do not provide money directly, but only act as intermediaries – they connect people looking for a loan with a third-party lender that can provide the loan.
Keep in mind that some companies act as direct lenders in some states while they operate as affiliate lenders in others, which is often the with Ohio and Texas. For this reason, you should always check if direct lending services are available in your state.
? How much money can I borrow?
The amount of money that can be borrowed varies immensely and depends on the lender of your choice and on the regulations in your state of residence. That being said, payday loans normally range from $100 to $1000.
? When do I need to repay the loan?
Payday loans are regarded as short-term financial solutions and are normally meant to be repaid within two to four weeks. Nonetheless, the duration of the loan may vary significantly depending on the terms prescribed by the law and the company of your choice.
In most cases, payday loans should be repaid in full on the agreed due date that usually coincides with your next pay date. However, some companies also offer the possibility of paying in smaller installments over a longer period of time, e.g. six months.
? Can I repay the loan before due date?
Loan companies often allow you to repay your loan before due date with no additional expenses. In fact, by repaying earlier, you may even cut down on the expenses and pay less than you would be required to on the due date.
? What if I can’t repay the loan on time?
If you fail to repay your loan on time, you will probably be required to pay additional late payment or non-payment fees, plus any potential fees determined by your bank. The lender will attempt to collect your debt and may also sell your debt to a third party. Although lenders are normally not allowed to use or threaten to use criminal process in order to collect payments from you, if you miss a payment or do not pay at all, you will eventually be required to pay (significantly) more money than initially agreed, which is why we recommend that you only take out a loan if you are certain that you will be able to repay it in a timely manner.
? Can I refinance my payday loan?
Many loan companies allow you to refinance your loan and sometimes there are several refinancing options available. However, in order to prevent you from entering the endless cycle of taking out one loan after another and accumulating your debts, some companies refrain from such practices.
? Do lenders check credit rating?
Lenders often provide payday loans to customers with bad credit score. Good credit rating is rarely listed among requirements that one has to meet in order to qualify for a payday loan. As long as you have a steady source of income and meet other minimum requirements, you should have no problem taking out a payday loan, regardless of your credit rating.
? What are the downsides of payday loans?
There are several downsides of payday loans, the greatest one being generally high fees and APR, which make them one of the most expensive financial solutions. They should be regarded as a last resort and approached with extreme caution, not only because of the great expenses attached to them but also because of the danger of falling victim to the scams and frauds that abound in the lending industry, especially when it comes to short-term solutions such as payday loans.
? Is my personal information safe?
Good payday loan companies, especially state licensed ones, take adequate measures in order to protect your personal information. Unfortunately, this is not the case with all companies, so be sure to check if this is clearly stated on the company’s website. You should also keep in mind that some companies do protect your information from intruders, but share them with other affiliate and non-affiliate companies for marketing purposes. Unfortunately, this is not always stated on the company’s website, which is why it is wise to inquire about their practices regarding information sharing prior to taking out the loan, especially if you are not comfortable with your information becoming available to entities other than the lender.
? Will I need a fax machine to apply for a payday loan?
Once again, this depends on your loan provider and your state of residence. Some loan providers offer faxless payday loans, but this option is not available in all states. Furthermore, some states require that you fax additional documents even if you apply for a faxless payday loan, which is why you should review state regulations in order to get precise information on this subject.
? What is a personal loan?
Personal loans are also called unsecured loans for the simple fact they are not secured against any asset, such as your home, car or other property. Unlike a mortgage or a car loan, there is no collateral. Instead, the loan company uses your credit score to determine whether you are eligible for a personal loan, for what amount and at what interest rate.
? Is a personal loan a good solution for me?
While a payday loan is a good idea for small, short-term expenses, personal loans are more suitable for large expenses, such as debt consolidation or any other type of major expense, such as a large home improvement project, remodeling, buying a car or a similar expensive asset, and so on. Personal loans are a better idea for people with solid credit score than for those with not-so-ideal credit score, simply because those with bad scores will most likely get higher interest rates.
? Why are personal loans useful?
The main reason why people opt for a personal loan is that the interest rates are usually lower than those for a credit card, and they are fixed, which means stability. Also, you receive a lump sum immediately and you can use it any way you like, without the bank or the loan company managing your expenses and the way you use the money. The payments are fixed in a way that is the best fit for your budget and the payment term is also fixed, usually from one to five or six years.
? How and where do I get a personal loan?
Up until recently, banks were basically the only institutions offering personal loans, and they still do, but the rates are generally higher and the requirements are stricter. There are also credit unions, which are similar to banks but offer somewhat lower rates and finally various loan companies, many of which offer quick and easy online loans. These companies, just like banks and credit unions, will have to look into your credit score to determine whether you are eligible for a personal loan.
? What are some personal loan requirements?
In order to get a personal loan, you will have to be 18 or older, have a steady source of income and an active checking account. Depending on the bank or company, there will be the minimum required personal income, usually in the range between $22,000 and $25,000. Also, you will have to have a fairly strong credit score. Some lenders will accept less-than-ideal credit score but in that case your interest rate will be significantly higher.
? How soon do I get a personal loan and what are the fees?
Personal loans are usually processed very quickly and you will most likely get your answer right away or the same day. The money will be transferred to your account between 24 business hours and 3-5 working days, depending on the bank or loan company you applied with.
? What is a title loan?
A title loan or a title pawn, as it is called in some parts of the country, is a loan that uses your car or your motorcycle as collateral. In other words, if you have a car or a motorcycle in your name, and if it is lien-free, you can use it to get some quick funds, the amount of which depends on a variety of factors, such as the value of your vehicle, the state you are applying for a loan in, and so on. In order to get this kind of loan, you will have to allow the lender to put a lien on your vehicle and temporarily give them the hard copy of your vehicle title.
? Is a title loan a good solution for me?
It is if you need some money quickly, for example if you need to repay a debt or you have an unexpected expense, and you have a fully paid vehicle in your name. Just bear in mind that there will be interest, as it is the case with all types of loans, and that it might be pretty high, so you should carefully weigh all the pros and cons and see if this type of loan fits your personal financial needs in the given moment. Also, title loans are ideal for people with bad credit score because the lender will not look into that.
? Why are title loans useful?
The best part of a title loan is that it allows you to get the funds you need very quickly, usually the same day. Another major benefit is that your credit score and your background don’t matter. All that matters is that you have a lien-free car or a motorcycle in your name and that you can provide the title that proves it. The approval rates for title loans are quite high, in fact they are higher compared to any other type of loan. Finally, you still get to keep the car and use it until you pay back the loan.
? How and where do I get a title loan?
Banks normally don’t work with this kind of loan but there are companies that specialize in title loans. It’s basically like pawning your car, except you get to keep it while you’re paying off the loan. Many people prefer online loan companies because the process is very quick and easy and can be done from home. Still, if you need money extra quickly, the process is faster if you go to an actual title loan store, because in that case you will be approved within 30 minutes or so and your funds will be available right away.
? What are some title loan requirements?
The principal requirement is that you possess a hard copy of the vehicle title in your name and that there is no lien on it. This means that your vehicle has to be paid in full in order for you to get a title loan. You will have to show some ID and the hard copy of the title, which will remain at the loan company until your loan is paid off in full. Those with a poor credit score will be happy to learn that title loan companies do not check your credit score or your background, which means your loan will most likely be approved regardless of your rating.
? How soon can I get a title loan and what are the fees?
If you apply in an actual loan store, your application will most likely be processed immediately and you will receive the funds right away. Online application takes a bit more to get processed, but it usually doesn’t take more than three business days for the funds to get to your account.
The typical APR is quite high, up to 300%, and depending on the company, there can be a number of fees, although many companies gave up on certain fees, such as prepayment fees, in order to attract more customers.
? What is a business loan?
Business loans are loans used specifically to help small or startup companies get on their feet or get some financial assistance in times of need. The debt, of course, is repaid with certain interest, which depends on the lender company terms and conditions.
? Is a business loan a good solution for me?
If you are starting a new business, or if your business – whether it is small, medium or even large – is in financial difficulty, you could use a business loan to get back on track. Many small businesses initially require a loan because there are a lot of expenses involved in starting a business, so this is a fairly common option. Bear in mind that the loan will have to be repaid at certain interest rates, which can be quite high.
? Why are business loans useful?
The main reason why people get business loans is because they don’t have enough funds to sustain their company, shop or service on their own. This happens a lot with new businesses and startups that don’t have investors or financers. A business loan will help you cover all the necessary expenses and get your through the initial phase of business when you are still not making enough money to make it on your own. Also, business loans are useful for instances when the business is not doing very well and requires some outside financial assistance.
? How and where do I get a business loan?
You can get a business loan from a bank or a financing institution. Small loan companies can cover micro-loans for startups and small businesses but large loans, for more than $250,000, are usually only approved by banks. Some institutions will ask for collateral and require a good credit score, in which case your interest rate will most likely be lower compared to microlenders which approve quick funds and do not necessarily require collateral and tolerate less than ideal credit scores.
? What are some requirements for a business loan?
It depends on the lender. Banks usually ask for solid credit score, at least above 680. Other factors that may be taken into consideration include how long you have been in business, how much money you make and whether or not you can make your payments. On the other hand, lenders like peer-to-peer and micro-loan companies may be less demanding and approve loans even to companies with lower credit score, shorter time in business and so on, but they will still require some minimum annual income.
? How soon can I get a business loan and what are the fees?
Business loans may take a longer time to be approved and the funds to be transferred than title loans, personal loans and especially payday loans because there are more factors to be checked and taken into consideration. Still, you can get a business loan with from a bank within 3-7 business days and from a small loan company as soon as in 24 hours.
As for the fees, they greatly vary depending on the lender, and so do the rates. Banks usually offer the lowest APR and with smaller loan companies it can go up to 113%.
? What is an auto loan?
Simply put, an auto loan or a car loan is the loan you take when you want to purchase a vehicle but you don’t have enough money and you don’t want to lease. You are not paying for the depreciation of the car, and instead you are paying the purchase price, plus, of course, interest.
? Is an auto loan a good solution for me?
Auto loans are ideal for people who need a vehicle very quickly and who want to borrow money to make that purchase, instead of just leasing the car. If you are confident that you will be able to make the payments on time, the loan principal plus interest, then an auto loan may be a good solution for you.
? Why are auto loans useful?
An auto loan usually allows you to get a better, more expensive car, which pays on the long run, since you will not spend as much on repair and maintenance as you would for an older, cheaper car. Auto loans are also rather low-risk, especially if the loan is unsecured or if the vehicle you are purchasing is used as collateral. Also, the cost of the car will be spread over an extended period of time, through fixed payments, so you can plan your budget around it.
? How and where do I get an auto loan?
You can get an auto loan through a bank, a car dealership or small lender companies and online lenders. Banks are the safest option, and the interest rates are usually the most favorable, but the downside is that the down payment is often quite high, especially for clients with bad credit score. Online lenders are convenient and fast but sometimes only work with clients with good credit score.
? What are some requirements for an auto loan?
It all depends on where you are applying for a loan. In addition to being 18 or older, with a steady source of income and an active checking account, your credit score might also be taken into consideration. In some states, you will have to have insurance, too. Needless to say, a valid driver’s license is an absolute must.
? How soon can I get an auto loan and what are the fees?
Auto loans are usually approved very quickly and you can get your money or your car in a day or two. In fact, if you choose bank financing through a car dealership, your loan can even be approved on the spot and you can drive off in your new car right away.
As for the fees and interests, it largely depends on where you are getting your loan for and for how long. In general, those with better credit score get lower interest rates, especially if they opt to make a bigger down payment. The longer payment terms also imply higher interest rates, but they also include lower monthly payments.
? What is a student loan?
A student loan is a loan that students use to finance their higher education (college, university, post-grad, etc). These loans cover the tuition, fees, supplies, text books, as well as living expenses. Higher education can be very, very expensive and a great number of students are actually relying completely on student loans.
? Is a student loan a good solution for me?
The answer is quite simple – it is, if you got accepted into a college or a university but have to means to pay for it.
? Why are student loans useful?
These loans are very useful for people who are unable to finance their own higher education but want to pursue it anyway. Student loans get repaid over an extended period of time, and only after you have finished college or university or other institution of higher education. Usually, the lender does not expect you to start repaying your student loan debt until you have found steady employment.
? How and where do I get a student loan?
There are two main types of student loans – private and federal. Private lenders are usually recommended by your college, as those are some trusted institutions they are working for, but of course you don’t have to use them. Also note that private loans usually come with credit score checks. Federal loans are usually more beneficial, as they come with lower and fixed rates, higher tolerance, income-based payment, and they are often subsidized, which means you might get out of paying the interest on your own, which does not apply to private loans. On the other hands, private loans may come with tax-deductible interest, discounts and o prepayment penalties.
? What are some requirements of a student loan?
For a federal student loan, you will have to be fully enrolled in a college, have a valid social security number, and, if you are male, be registered with Selective Service. You also have to maintain satisfactory academic progress. For a private loan, the terms are pretty much the same plus you or your cosigner have to have a decent credit score and a minimum annual income of between $18,000 and $22,000, depending on the lender.
? How soon can I get a student loan and what are the fees?
For federal loans, it may take from three days to three weeks for your application to be processed and the financial aid award letter usually comes in March or April, which means you have to plan ahead. Private loans can be approved or rejected immediately, but the loan proceeds may take from two weeks to two months to be sent to you or your college.
Fees and interest rates depend on the type of loan and the lender. Interest rates can go anywhere from 3.5% to 18% and the fees from 1.000% to 4.000%.
↑ Back to Index