Have you ever looked for a way to borrow money fast? If so, you may have come across the term “payday loan” in your research. If you’re curious about how this popular loan works, this short guide will tell you what you need to know about payday loans.
What is a payday loan?
Payday loans are small, short-term loans usually repaid within two to four weeks or on your next payday. Payday loans are designed to help you get fast access to funds in emergencies and will usually provide access to up to a few hundred dollars – enough to cover the cost of groceries, gas, home or car repairs, or medical expenses.
Since payday loans are unsecured, you don’t have to worry about losing collateral. They’re also quick and convenient without the long waiting periods that may come with traditional personal loans.
Am I eligible for a payday loan?
Applying for payday loans is simple and straightforward: you must be 18 years old or older, have a job or source of income, have a checking account, and have a valid proof of your identity.
Unlike some traditional loans, such as personal loans or home equity loans, a payday loan does not require good credit, so you may apply for and get a payday loan even with poor credit.
How soon can I get the funds?
The payday loan application process is short and simple. Your application form takes only a few minutes to fill out, and many lenders offer fast or instant approval decisions. In some cases, you could get approved within a few minutes of submitting your application and may get your funds within 24 hours or on the same day.
Where can I get a payday loan?
Payday loans are available both online and in-store. Applying for an online payday loan allows you to process your loan without needing to visit a store. The application process is quick and easy, and once approved, the loan amount will be deposited into your bank account.
Some applicants may prefer to apply in-person if a lender’s store location is close by. Similar to applying online, the in-store process may only take a few minutes, and you could receive the funds on the spot.
The bottom line
Payday loans can be a great option for anyone looking for urgent funds. They can be repaid using your next paycheck and – unlike traditional bank loans – take only a few minutes to process. Payday loans also don’t require a good credit score. However, it’s a good idea to note that payday loans are not intended as long-term financial solutions and should ideally be repaid within the specified period.