What is a Payday Loan?

A payday loan is a shot term cash advance which is due on your next payday.

A payday loan, also known as a check advance or paycheck advance, is a short-term loan designed to carry you over until your next payday. Living paycheck to paycheck is a common occurrence for many families, so when financial emergencies happen, these unexpected expenses can quickly deplete any available cash. Many people have bad credit and traditional banks and credit card companies deny credit to those individuals. Without extra cash on hand and access to traditional loans and lines of credit to pay for these emergencies, many families are unable to pay their regular bills on time. Payday loans are designed for financial emergencies and help you get through until your next paycheck.

Most people do not plan financially for emergencies. Unexpected expenses can arise from medical emergencies, car repairs and other immediate cash needs. Since they’re not something most people plan for, they can cause huge financial problems for families low on cash and denied access to credit.

To the relief of many in these situations, short-term unsecured loans are available in the form of payday loans. These loans offer many advantages. You do not have to have good credit or even any credit at all. Many lenders do not perform a traditional credit check on you before approving your payday loan. Many do not report this loan to any credit reporting agencies thus not hurting your current credit score.

Payday loans are also easy to apply for. Most online applications take as little as 5 minutes to complete. They ask for your personal information, banking details and a few other questions. Once you have reviewed your information and hit ‘Submit’, you find out if you’ve been approved usually within minutes.   And if approved, you will likely receive your money within 24 hours, usually overnight.

Payday loans are best to cover you in the event of a financial emergency until your next payday. Some typical financial emergencies were covered but others you may not have thought of are late payment, penalty and overdraft fees. If you write a check that you can’t cover, your bank will charge you an overdraft fee. If you can’t make your minimum credit card payment, the credit card company will charge you a late fee. In addition to that, your late payment will be reported to credit reporting agencies. Lenders charge fees to take out payday loans, but often these fees are lower than what banks and credit card companies will charge. Although the possibility of a late payment may not seem like a financial emergency, it may be beneficial to you to start thinking that they are.

An advantage of getting a payday loan online rather than a local store is access to payday loan brokers. If you apply for a payday loan at a local store or with a direct lender online, your chances of getting a good deal and ultimately approved are lower. With a payday loan broker online, lenders compete to give you a loan. There’s a higher chance you’re get approved and also getting lower fees and interest rates.

The alternative to applying for a payday loan online is to go to a local store. At the store you might be able to come out with the funds in hand, but the fees will be generally higher and your chance of approval will be lower. Also, there’s the whole hassle of having to drive to the store and wait in line. If you want a higher chance of approval, the best rates possible and the most convenient application, apply online and through a broker.

Payday loans are short-term unsecured loans used to cover unexpected cash expenses and financial emergencies. They are easy to apply for, you get the cash fast and don’t need good credit. For the best rates and higher chances of approval, apply online through a broker. Remember, these loans are for short-term financial problems and should not be considered a solution to long-term financial problems.