A payday loan is a type of short-term loan that needs to be repaid in full on a borrower’s next paycheque.
Payday loans can range from a few hundred dollars to over a thousand dollars. Payday lenders typically offer these short-term loans for periods of 30 days or less. To help you with your research, you can explore a list of online payday lenders.
Benefits of a payday loan
A payday loan provides a quick and easy way for you to get the cash advance that you need. Payday loans are designed for people with an average or below-average credit score and who don’t have any other way of getting money quickly.
- Payday loans provide a quick and easy way for consumers to get the cash they need.
- Payday loans are designed for people with an average or below-average credit score and who don’t have any other way of getting money quickly.
- A payday loan is a short-term, high-interest type of loan that some borrowers use to cover expenses until their next paycheque.
Payday loan has an interesting fanbase. Some love it or hate it. There is no middle ground almost. People who hate it say a payday loan is an expensive form of credit. Payday loans are so expensive, and they even call it ‘loan sharks with wings’.
Since payday loans will often have a high-interest rate and require you to provide a post-dated check or a bank account as collateral this anti-payday loan crowd preaches these types of loans are predatory and only exist to take advantage of the poor.
Now if you are on the other side of the equation, you will say things like ‘payday loans helped me pay my bill on time’ or they helped me out with the expenses, etc. So everyone has their own viewpoint on this.
Moving on, how do you get approved for a payday loan? Do you really need good credit for it?
Having good credit
When a person wants to apply for a loan from the bank, they need to go through a credit check. The credit check will be performed by the lender on behalf of the lender. They want to know that you are going to repay the loan and that your repayment is going to be worth their investment.
A person may not get approved for a loan if they don’t have any credit history, but they can still get approved for a personal loan if they prove that they have income and assets.
Some factors that affect your credit score are the age of your credit account, how much you owe in total proportion to what you can afford, how often you use your credit, and whether you pay your bills on time.
Improving your credit
In the United States, consumers have a credit score that ranges from 300 to 850. The higher your credit score is, the better the terms of your loans and other types of credit will be. If you want to improve your credit score, read on for some tips on how to do so.
One way you can improve your credit score is by paying off all your past-due balances and making sure they stay current. Another way is by not applying for new lines of credit when you know they will lower your score. Finally, if you can’t pay off all of your debt in full each month, look into consolidating it with an unsecured loan or balance transfer card.
So as you can see, getting a payday loan is quite common. Although there is a process that you need to go through for approval, it is something that’s accessible for most.
Alicia Saville did her degree in psychology at the University of Hertfordshire. She is interested in mental health, wellness, and lifestyle.