With the economic downturn, more individuals are living paycheck to paycheck. What happens when someone has spent their last dollar on the gas bill only to step outside and find their car won’t start? There was a time when that person could call up the bank and get a signature loan. That time has passed. Banks are making it more and more difficult for the average person to get a loan. Another type of loan has made the way into America’s mainstream, this is the payday advance.
Payday Loan Basics
These payday loans are generally made without a credit check but it is necessary to provide proof of employment to determine eligibility for payday loans. Usually the income requirements are that the applicant has been employed for at least six months, makes at least $1,000 per month and is paid via direct deposit. Since there is no credit check, this type of loan is much easier for those with less than perfect credit to get the money they need, when they need it. This type of loan usually has a high interest rate. The repayment is taken directly out of the checking account provided at the time of the loan. The due date would be the individual’s next payday.
Amount of Payday Loan
Most payday advances allow the individual to get up to $500 overnight and in some cases in as little as two hours. Loans for more than $500 generally take a bit longer to approve and process. Many loans can be processed online with no need for face to face interaction. This makes it easier for those that are worried about someone seeing them at a brick and mortar store front. More and more payday loan lenders are making it even easier to apply for a loan since they have eliminated the need for signed documents.
Loan Documents Needed
There is no need to provide documentation as to what the money is being used for. This is not like taking money out of a 401K/IRA or other specified usage savings accounts. This money can be used for emergency needs such as car repairs, home repairs, unforeseen medical bills or any other needs the person may have.
Each state varies in laws but generally only one payday loan can be active at a time per payday lender. Even though the due date is the next payday, some payday lenders offer loan extensions. There is typically a limit to the amount of extensions that can be given per loan.