Payday loans can be a valuable asset to those in need of money in a hurry, to cover unexpected financial situations. For those who are new to the concept of payday lending, there are several things you need to know about the loan process.
First of all, newcomers may not be allowed to borrow as much cash as someone who has taken out a previous payday loan. In some instances, first time borrowers may only be able to borrow $300. Once you have established a good working relationship with your lender, though, you will be able to receive loans in larger amounts.
While they do not require a credit check, lenders do ask for some basic information, including identification, proof of employment and income and bank account information. The process begins with a short comprehensive application. Once the application is completed, the approval process usually only takes a few minutes.
Once approved, you and your lender will agree upon a repayment date, generally the date of your next payday. You will promise to return to the lender on this date, and repay your loan in full, along with any interest and fees that may apply. When applying for online loans, the lender will require that your pay check be directly deposited into your bank account. On the repayment due date, the full amount of your loan will be deducted from your account.
If, for some reason, you realize that you will be unable to repay the entire amount of the loan on your next payday, you may contact the lender in advance and ask for an extension. For a small additional refinancing fee, the lender will grant you a short extension.
As is the case with any loan, you can avoid financial overload by never borrowing more money than you actually need, and by repaying the loan promptly.
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