Payday loans: the helpful alternative
The global recession has been a jolt of reality to millions around the globe. In the US, people have witnessed an insecurity that they only read about in history books about the great depression in the 1930s. Payday loans have gained popularity in these times as an easy resource to sustain their normal way of life. The short term loan system enables people to borrow in small principal sums and repay instantly on their next payday. The popularity of this type of loan can be attributed to the willingness of many lending institutions to approve these loans quickly and transfer emergency funds via direct deposit, usually on the same day. Peter, a factory technician, recently found himself unable to cover the cost of living expenses such as groceries, electricity and water bills. Peter commented "I was in real trouble with overdue bills piling up before my next payday. So, I decided to apply for a payday loan. My loan was approved instantly online and the money went into my checking account the next morning."
The application process
Different lending institutions will have different application processes for payday loans, but they all have some features in common. There will be some basic paperwork to fill in and the lender will need to see some proof identity and some proof of income documentation - a current bank statement showing regular deposits or a recent payslip will do. This process is particularly easy and fast to complete online. The borrower will also need to be a US citizen or permanent resident, over 18 years of age, with an active checking account. In most cases, the lender will also require that you have been employed at your current workplace for a minimum of one month. Once your loan has been approved, you will be charged a loan fee. This fee varies with different lenders and depends on the repayment period of the loan, but on average the fees are between 5 and 8 per cent of the total amount borrowed.
If a borrower has been ineligible for a regular loan by other lending institutions, this generally does not affect their ability to obtain payday loans. Many money lenders will still allow borrowers to obtain this type of loan, even if their credit history is less-than-perfect. This is because the most important criteria for payday loans is current employment, so if the borrower can prove he has a secure job, they are eligible to apply for a loan amount corresponding to the amount they get paid as salary. For most people this is an amount between $500 and $750. This means that such loans are easily repaid once the borrower has received their usual pay check from their employer. As a result, borrowers do not need to worry about money lenders doing background credit checks.
Say goodbye to money issues
Given the simple approval process, this type of loan enables people to solve their immediate money problems while they wait for their next pay check instead of accumulating a debt that they cannot handle. This makes payday loans the perfect alternative for those experiencing difficulty in paying their day-to-day living costs. Even those people who have been turned down for regular loans can be eligible for payday loans. People are assured by the fact that they do not need to be the victim of a huge debt and instead manage their cash flow issues easily by borrowing just the amount they require for their immediate requirements.