No one promised it would be an easy game to play. Life is full of crazy moments and unexpected struggles. People often try to resolve different issues resulted in the lack of finances. It does not matter if one has a highly-paid job with a high income or tries to put things together with a minimum wage. We all may have budget troubles at any stage.
Payday loans online are the new-gen instrument in the hands of today’s consumers looking for fast cash on the web. The new financial service has grown into the major trend helping both borrowers to benefit from quick cash and lenders delivering comprehensive financial assistance online.
The given article will take readers behind the scene of payday loans online. The mission is to clarify whether they are safe to obtain or if there any risk of getting into another budget trouble. We will have a closer look at recent stats, the key benefits, and tips to choose a trusted lender and how to apply for payday loan.
What are payday loans online? How do they differ from traditional services and credits delivered by official financial institutions such as banks? The difference is huge. The key idea of quick cash is to provide fast money but at a smaller amount if compared to conventional credits.
The loan amount generally ranges somewhere between $200 and $500 depending on the state and its regulations. Bank customers may count on bigger sums although the application form is much longer. Another crucial difference lets fast loans stand out. They were mainly designed to cover urgent needs and make it easy for the customer to give the money back in 14-30 days.
As a result, we have a mainstream financial service that is extremely popular among US residents. To prove this particular statement, let’s have a look at the most recent stats.
Payday Loan Stats
When doing the research, one will hardly suffer from the lack of data available online. The stats are delivered by various services and agencies out of the box. They may include social surveys, consumer advocate communities, mass media, etc. We have collected all the recent stats that prove the popularity of payday loans online. So, here we go.
- More than 2.6 million households access fast cash at least once in a year.
- More than 1 in 50 US-based citizens try to qualify each year.
- The average annual wage obtained by borrowers is around $30,000.
- 70%+ of all Americans use quick cash services to handle their running costs.
Reasons to Use Payday Loans
It is not only about simplicity. Getting cash advances has turned into a new consumer habit. Some people tend to borrow money from online agencies and websites because they are generally easy to get. Why should one ever try to find a more difficult way? At the same time, we need to take into account the following stats:
- More than half of all Americans face unexpected obstacles and budget troubles every year.
- Over 10% of all US citizens have bad credit, which prevents them from getting conventional credits.
- About a quarter of US residents do not have valid banking accounts, which also makes it difficult for them to turn to credit unions and other financial institutions.
As a result, we have at least 12 million potential payday loan consumers who may access the service on a regular basis. If it was not for fast cash providers, it is hard to imagine what they would do to handle their budget troubles. Another crucial benefit is that bad credit will no longer prevent customers from getting cash.
Payday Loans Bad Credit
Issues related to low credit have always been the main obstacle in an effort to resolve financial troubles. Banks simply refuse from dealing with such consumers no matter why one failed to repay earlier. The slightest miss may appear to be crucial no matter if you forgot the date or failed to find necessary cash and repay promptly.
Of course, this feature is very important in terms of evaluating a borrower’s creditworthiness. However, it works only for long-term loans that are mainly delivered by conventional institutions. As you already know, payday loan terms are generally shorter. They vary from 14 to 30 days with some slight changes depending on the particular state regulations.
Under such circumstances, your credit should never bother anyone. Salaries and long-term work are more important for the company to calculate the level of risk. That is why eligibility differs, while the approval process is faster. If you have poor credit, keep in mind some tips that may come in handy.
Tips to Get a Loan feat Low Credit
- Request the report – first of all, you need to make sure you have poor credit. Each citizen has a right to request a credit report with the average score. It is calculated considering all previous credits, repayment delays, loan amount, etc.
- Make a positive balance – if the credit is poor or less than 600, payday loans online are the only way out. However, it is vital to have a positive balance. It will certainly be a huge plus in favor of your application.
- Be frank – never try to mislead a lender. Websites and agencies have full access to your credit score as well as other crucial parameters. Submit only real info as well as salary reports, credit card balance or any other copy required.
- Select a reputable website – with so many agencies offering no credit check loans, you still need to pick a secure and reputable website.
Payday Loans Online
The term “online” here means that a user may enter the global network to access fast cash online despite the location. The times of live kiosks and physical sites are gone. With the Internet and mobile industry evolvement, everyone may obtain quick money with a tap.
The qualification process is super easy. It does not require any technical or financial skills. All you need is to indicate the sum you want to get, indicate the info, and submit copies in case of necessity. A borrower will be notified about the decision via email or phone in less than 24 hours. Sometimes even faster.
Payday Loans Near Me
Those who want to access only state-based lenders may benefit from online services that show payday loan locations next to you. Moreover, there are dozens of fast cash apps that show both online and physical companies that deliver urgent financial assistance.
Are Online Payday Loans Safe?
That depends on what website or company a customer chooses. The only way to avoid fraud or unfair charging is to opt for trusted lenders. It means they should have a valid license to act as quick cash providers in your particular state. In addition, they are not supposed to exceed limits when offering maximum loan amounts. The same works for loan terms as well.
Answering the question, payday loans are safe but only when in reference to licensed and reputable companies.
Tips to Choose a Trusted Payday Lender
To prevent the slightest risk of being misled by the potential lender, a borrower needs to take into account the following features:
- Reputation – with so many customer reviews and testimonials, a borrower will easily browse dozens of websites with detailed descriptions, fair overviews, client rates, etc. Social media platforms might also come in handy. Moreover, considering the stats, some of your friends or colleagues could have opted for the same lender.
- Official Listing – each state has a list of all licensed loan providers. Users may visit the website for free and find a company there.
- Contacts – if a website does not have a valid physical address or phone, it should be a warning. Moreover, trusted companies offer several ways to get in touch instantly including Live Chat or Call-me-Back feature.
A good idea is to do the research instead of selecting the first website you come across. At the same time, make sure the company meets all necessary state regulations or acts on a legal basis.
Direct Lenders or Brokers
Direct lenders are companies that interact with the borrower directly without intermediaries. It means that you sign an agreement with the agency that provides fast cash directly.
- Faster approval.
- Minimum paperwork.
- Clear pricing and wagering policy.
- Safe and secure services.
- Fixed APR rates;
- Overpriced charges.
- Inflexible terms.
Brokers are intermediaries between the companies and people craving for fast cash. They act as online platforms and link borrowers with their potential lifesavers. Brokers charge additional commissions for their separate services but ensure additional flexibility.
- More lenders to choose from.
- Flexible terms.
- Lower fees.
- Additional fees.
- Unclear pricing policy.
- Third-party interaction.
Are Online Payday Loans Legal?
That mainly depends on the state. There is three major status for payday loans in each part of the United States. They include:
- Legal with restrictions;
The services are currently illegal in 8 US states. The authorities of 5 states allow cash advances although with different restrictions in terms of the loan amount, repayment schedules, general requirements, etc. The rest states permit payday loan lenders to offer their services on a 100% legal basis. Have a look at the picture below to clarify the legal status of payday loans by state:
Online Cash Advance Eligibility
Most of you are well aware of the general requirements necessary to qualify. The section is mainly ti revise them as well as pinpoint some slight differences that may take place from state to state. For example, on the majority of occasions, the required age must be over 18. However, some authorities do not permit to provide quick money to people under 19.
At the same time, payday loans online are different from conventional loans featuring softer or zero credit check. This fact may also influence the list of issues a borrower needs to take into account.
General Requirements to Qualify
As a rule, officially licensed companies publish the full list on their sites. If not, you may look them up on the official regulation page related to cash advances. Another good idea is to contact the lender directly and clarify the terms by phone or Live Chat. If none of the above-mentioned suit you, the following are obligatory for consideration.
As we have mentioned earlier, an applicant must be older than 18. In some states, the minimum age required is 19.
Place of Work
To qualify, you need to have been working on the current position for not less than 6 months. The longer your steady working experience the better.
According to the latest stats, a borrower is unlikely to be approved in case the monthly wage is lower than $1,000. However, the recent stats show that the majority of borrowers have an average income of around $30,000 per year.
A few lenders do the credit check. If they do, it is much softer if compared to banks and credit unions. On the other hand, you still need to have a positive balance.
All borrowers should note that simply typing in the info required might not be enough. Companies often ask to submit copies for real bank receipts or official docs from the employer to prove your place of work, income, etc. Make sure you have them to provide and increase your chances for fast approval.
Payday Loan Amount
The state authorities determine the loan amount. As a rule, it varies from $200 to $600 depending on the state. If a company promises quick sums that exceed those limits, you’d better stay away from such lenders.
Despite the loan amount, the researches show that Americans usually borrow somewhere around $375. This sum is mainly determined by the ability of borrowers to repay rather than an inability to access more. For example, if you get $375 as a payday loan online, you will need to repay about $520. The more you get, the more you need to give back.
The stat shows that a few customers are eager to deal with another debt rather than being able to repay in one or 2 installments.
Repayment of Your Payday Loan
After approval comes the repayment. Getting fast cash is only 50% of success. You will also need to just cover the debt but also do it promptly with no delays. If you miss the repayment date, it may result in extra commissions or even fines. Moreover, it will destroy your credit score with zero chances to get assistance with or without a credit check.
Tips to Repay the Debt
- Arrange Your Budget – proper budget management and organization are vital whenever you want to borrow money from the lender. When we say “arrange” we mean you should clarify all terms and conditions beforehand. Calculate the final sum you need to give back with all the commissions, APRs or possible penalties for delays. Of you can afford the loan, then go for it.
- Consider Costs – track your monthly costs and compare them to the sum you earn. If the balance is negative, you will never be able to repay the loan. So, you’d better avoid it.
Another good idea is to search for other sources of income including part-time jobs, working shifts as well as prevent yourself from buying useless staff. If you have the slightest chance to avoid loans, do it.
Payday Loan Regulations
Payday loan regulations refer not only to the fact of whether they are legal or not. The rules can be issued regarding the number of loans to be accessed by a single borrower within a particular period. State authorities may limit the loan amount or terms as well as commissions or APR rates.
Regulations may also describe the ways lenders should charge their customers for missing the repayment date. They restrict or expand the cooling-off period, regulate the disputes between both parties, etc.
With so many issues and points, each borrower should clearly understand all the rules and restrictions before accessing the loan. Make sure you do not violate state laws. Otherwise, you will never be able to protect yourself from unfair lenders.