Payday loans are a form of cash advance against the next paycheck. The lender provides a borrower with money over the short term. Borrowers usually must repay the money by the next paycheck or within 30 days.
Amount of money loaned depends on the lender but usually does not exceed $1,500. Rates of interest are often much higher than with conventional financing.
In many cases, individuals can complete a loan application online and will not be subject to a credit check. Most lenders require that applicants be 18 years old, work full time, and have a valid and active bank account.
Quick approvals are usually granted and the money is deposited into the checking account of the borrower in a timely manner, sometimes within 24 hours.
Some lenders require submission of additional documents and paperwork, while others do not.
A payday loan or another form of cash advance loans can be helpful to someone in a dire financial situation. If the individual needs money immediately and is able to make repayment within the specified period, this is a reasonable solution to a cash need.
However, if the person can wait for funding or is unable to repay the money by the next paycheck, traditional financing will be a lower-cost method of financing.
