Payday Loans are when a company lends you money for a short period. The loan is usually a small loan that can be paid back on your next payday. You may have heard it called a cash advance also. The interest rate is a bit larger than a regular loan.
Why do I need this type of loan
You may think these types of loans are to expense, and you will never need one. You could use these types of payday loans if your car breaks down, and you are completely broke. Another great reason to need a loan is when your check is short, and you do not have enough for your rent or electricity. One of the most common reasons is when you are midweek and no money for food or gas. There are so many reasons why someone may need this type of loan.
How does it Work
How exactly does payday loans work? First, when you should research what documents you should have. This type of loan you can apply in person or online. Second, you have to apply for the loan. Even though most do not check credit. They do have other parameters you must meet. Normally they are looking for income, direct deposit status, and employment.
Requirements are different depending on the company you are going through. The main requirements that most require are as follows.
Government ID: This can be a valid driver’s license, a valid ID, or a valid passport.
Proof of income: This is usually a check stub.
An active checking account that you have had open for at least six months.
A blank check, but some will let you use your debit card.
Social Security number
If you are applying online, you need a valid email.
Depending on the company you choose, they may have other requirements not listed.
Advantages and disadvantages
Advantages include no credit check, they do not have a lot of requirements, and they are easy to access. Some of the disadvantages include they have a high-interest rate, can put you in debt, and are secure with a check.
If you find yourself needing a short-term loan, a cash advance is a way to go. This type of loan does have a few disadvantages, like a high-interest rate. They also come with a ton of advantages. A great advantage is no credit check. When you weigh the advantages and disadvantages, Advantages win.