Have you experienced having an emergency while being cash strapped? Perhaps you’ll feel hopeless and your mind has been racing against time to think of the solutions. It is during this nerve- wrecking situation that you are in that payday loans are much appreciated. However, what you don’t know is the high interest rate that comes along with them but the cost of receiving the loan might not be your immediate concern at this point since you need the funds very badly. Payday loans really work during a financial crisis. In fact, the moneylenders’ business is thriving when so many people are financially helpless.
There are several frequently asked questions that are worth remembering to learn how payday loans work.
What are some other terms for payday loans?
Emergency cash loans, payday cash advances, personal loan advances.
What is a direct lender?
A direct lender is the owner of the money that you are borrowing as a cash loan.
What is an offline lender?
It is a traditional moneylender you approach personally in a brick and mortar office. You can meet and see the lender face to face in person during the routine office hours and days of operation.
What is an online lender?
The company that operates payday loan business on the internet with loans available 24/7 through the lender’s website.
How fast is approval for instant loans?
There are online lenders offering instant loans who can approve the application in one hour or even faster.
Is a post dated check required?
There are some states that require a post dated check before a payday loan is approved. It serves as a guarantee that the borrower will pay the loan back by redeeming the postdated check issued.
Why is an active bank account needed for?
It is needed to allow the deposit of a payday loan. Normally, it is required by online lenders to facilitate the transfer.
Are interest rates usurious?
Yes, some states have branded them usurious because they are much higher than the traditional rates.
If I am eligible to apply for instant cash loans, what are the other important requirements before I can borrow money?
You must have a valid bank checking account with a bank that operates online. The bank account must be active for at least three months. It must also appear in your bank account that your regular earnings are reflected there.
If I would be granted an online loan, how would be my payments collected?
Your active bank account would be debited for the amount you borrowed including interest as agreed upon.
If expressed in dollars, how much is a normal fee for payday loans?
Normally, it is around $25.00 for every $100. However, the interest rate is always in the percentage bracket ranging from 36% to 780% or even up depending on the lender and on existing laws governing within the state it operates.
How can I be sure that the lender is an authorized operator?
You may always verify the lender’s accreditation with the government agency in your community or state. Check out with the Better Business Bureau to be assured that you are dealing with a competent lender.
Don’t just negotiate with any kind of lender without verifying their accreditation for your own security. This is one way to avoid scams perpetuated by scam lenders. Similarly, if you know how a payday loan works, it is not difficult to identify genuine players in this kind of business.