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What Are the Standard Payday Loan Requirements for Applying?

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Who can qualify for a payday loan? Learn the payday loan requirements in this guide to who can and can’t apply for payday loans.

Emergencies and accidents can strike at any moment. They target anyone, anywhere, anytime. When an emergency comes, it can leave you vulnerable if you are not careful. 

At times, these surprise situations can leave you dry with resources, including finances. It’s even worse if you have bad credit. You’ll find it difficult to secure loans and other financing options. 

However, there is an option available that you could resort to but it needs a whole deal of preparation and understanding. This solution is a payday loan.

Not sure how they work? Let’s start looking for payday loan requirements and what it provides:

1. What is a Payday Loan?

Before we go through the payday loan requirements, let us look at what this loan is. A payday loan is a short-term personal loan, notable for not involving any collateral or credit check. This option stands out when you end up running short and you need cash fast and quick. 

Payday loans get processed faster. However, you have to pay the loan back by your next payday – hence the name – otherwise you’ll incur high-interest fees.

It comes in other names such as cash advances or cash advance loans. Some refer to payday loans as post-dated check loans or deferred deposit loans. You can get the best payday loans at Dallasnews.com.

2. Reasons in Applying for a Payday Loan

Why consider applying for a payday loan? The most common one that stands out is due to emergencies. Imagine if you have to pay a medical bill tomorrow but your salary doesn’t come in until a few days after.

Any form of short-term financial hardship would be the perfect scenario for this kind of loan. It works well as a quick solution. 

That said, it shouldn’t be the crutch when facing financial troubles. Don’t rely on payday loans to purchase a new gadget, for example.

The loan comes with a high-interest rate, which compels you to have the loan settled at the soonest. Choose a different setup if you would rather have something more sustainable.

3. Payday Loan Requirements

In order to procure a payday loan, it would need a set of requirements before processing. These requirements would work as a reference point for the lender. These requirements ensure that the money comes back and the loan gets settled.

Here are the requirements asked for when you apply.

Financial Account

For this requirement, the lender needs an account from you. In this case, it refers to your bank account, credit union, or even a prepaid credit account. With this information, the lender can use this as a reference. 

Keep in mind that despite the need for a banking statement, the lenders do not take your credit score as a factor for approval.

Proof of Income

The other requirement that they would need to check is your proof of income. This can be in the form of a certificate of employment from your company or business. This acts as a document that proves you have a stable source of income.

This way, the lender knows that you have the capability to settle the loan before approving your application.

Valid ID

This requirement requires a valid identification document, to which an ID would serve that purpose. This is to verify two specific details. One is with the name and other pieces of information, while the other is to check the age.

Take note that you need to be at least 18 years of age to qualify for the loan.

4. Amounts and Rates

With the payday loan requirements laid out, you might be wondering about how much you can obtain from the payday loan. Before we proceed with the numbers, note that the amounts vary from your income and the lender you chose. 

Some states would have limits on how much you can borrow. The expected amount that you can borrow can range from $50 to $1000. This may increase if you’re a returning customer.

As for interest rates, this is one factor that pushes people to settle the loan as soon as possible. Here, you can see rates that could exceed as much as 500% or higher (even up to 1000%). Even though there are limits imposed on the size and duration of the loans, they can still be rather expensive. 

5. When Do You Get a Payday Loan?

With all the information that we have, a payday loan would be akin to the last resort when it comes to looking for emergency funding. If you reach a point where you don’t have enough money to last the day and you need to handle something with urgency, that moment would be the best time to get a payday loan.

Otherwise, consider your options. There are also other forms of loans that you can try out.

When you still need to weigh your options and you need advice, consider getting the help of a financial advisor. They can help you figure out the options you have available.

No Credit Checks?

One of the most notable aspects of payday loans is that they don’t require a good credit score. Most banks and credit lenders won’t approve loan applications if the person has a low score. This isn’t an issue with payday loans since they care more about your immediate capability to pay back the amount.

This is why they look for proof of income instead of doing a credit check. This isn’t a long-term loan, which means the lender doesn’t need to check your payment history or credibility over several months. It’s a short term loan so they simply need to check if you indeed expect payment from work or an allowance, verifying you can pay off the loan in a few days.

Need a Payday Loan Today? 

Do you find yourself in a bind with your finances and you have no idea who to turn to? If you are in such a situation and you have bad or no credit at all, you better have your payday loan requirements ready. 

With those requirements in hand, you can apply for a payday loan. However, remember to weigh your options before you proceed.

But it doesn’t end here. We cover a wide range of other topics. Feel free to read through our other guides and discover more tips today.

 

 

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