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Payday Loan Application

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HIGHLIGHTS
  • Use a payday loan only as an option of last resort.
  • Make sure to pay back a payday loan as agreed.
  • Research prospective lenders' reputation, before submitting a payday loan application.

Payday Loan Advice and Tips

Payday loans are quite popular. You likely have seen ads for payday loans on TV or heard them on the radio. Payday loans can provide you with quick cash in an emergency, but they have high fees and a very high interest rate.  While it may be worth the costs you will pay in fees and interest to take out the short term loan, don't submit a payday loan application unless you understand your obligations and what can happen to you if you don't meet them.

Pros and Cons

Payday loans can serve many purposes. They are designed to help you, over a short period of time, manage small, unexpected, or emergency expenses. When you take out a payday loan, you commit to repay the loan with your next paycheck. If you don't pay back the loan as agreed, you will find yourself subject to huge penalties and fees. Not paying back the inflated debt will cause aggressive collection efforts to ensue. Collection efforts can lead to you being sued, resulting in a judgment against you that can be enforced by a levy against your wages or bank accounts. The whole time the debt is in collections, it continues to increase rapidly, due to the interest rates that can be as high as 1,000% per year!

Payday loan tips

Keep the following in mind, before submitting a payday loan application:

  • If you decide that the benefits of a payday loan outweigh the costs, then shop around and find the cheapest rate and fees.  You can search online to find and compare lenders.
  • Apply with a single lender. If you are making a number of applications to various lenders then there is every possibility of your application getting rejected by all. The reason for this is that every payday lender checks your application from a national database of applications. Upon detecting a pending application for a payday loans in your name made to other lenders, then they will reject your application made to them.
  • Submit your payday loan application towards the beginning of the week and by Thursdays. This is because many lenders do not work on weekends and applications submitted on Fridays will get credited only on the Mondays of the following weeks, delaying your securing and using the cash.
  • Verify that the lender is a licensed payday lender. Look for online reviews and a BBB rating, so you can find any derogatory information that exists.
  • Be aware that unscrupulous lenders can deposit a post-dated check you leave with them early. If this happens, you can end up with bounced-check fees from your bank, compounding your financial woes.
  • Read the payday loan agreement thoroughly. Make certain you understand your obligations and the penalties you will be subjected to if fail to repay the loan as agreed.

Summary

Take out a payday loan only as a last resort. Far too many borrowers who utilize payday loan services don't pay the loan back as agreed and end up responsible for massive fees and interest charges. Before taking out a payday loan, exhaust every other option, such as borrowing from family or friends, taking a loan from a retirement account, or taking a cash advance on a credit card. Even if credit card debt ends up in default, the interest rate will be far less than on a delinquent payday loan. Lastly, before taking out a payday loan, call the creditor whose bill you were going to pay with the payday loan funds and see if you can work an extension or some other solution out.

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