A payday loan is becoming popular with each passing day. It is a short-term unsecured loan that the borrower can pay off before the next payday. These cash advances can be taken only for small amounts of money, generally less than $1,000. Payday loans have high rates of interest and repayment demands are for the short term. You can opt for a same day payday loan if you need to make payments like credit card bills, rents, and medical costs, food, and utility service payments.
How do Payday Loan Lenders Work?
There are many lenders who are exclusive for getting payday loans. Suppose you take a loan of $500 to cover all your essentials like car insurance and service payments. Though the name payday loan suggests that it is linked with the paycheck of the borrower, sometimes lenders issue loans if they are sure that the borrower will be able to access the cash for repayment soon. In the United States of America, payday loan lenders generally operate from storefronts. Many states in the US have regulated the interest rates for payday loans, making it hassle-free for the borrowers.
Rules the Same Day Payday Loan Lenders should Follow
There are some specific rules that the lenders for payday loans must follow. They are,
- The maximum interest they can legally charge is $15 when you borrow $100 every time.
- The lenders must specify when you must repay your loan.
- The lenders must clarify the total amount borrowed that you need to repay.
- The payday loan lenders must specify their rate of interest.
- The lenders must say the annual rate of interest cost for borrowing money for 14 days.
Documents Required for Getting a Payday Loan
There are certain documents that are mandatory for you to have for getting your payday loan approved by the lender. You must have the original proof of the following documents.
- Salary or Regular Income
You should have a monthly salary or regular income to get payday loans for any purpose. The loan lender will ask you to see proof of your income.
- Permanent Address
Another thing that you need to show while applying for a payday loan is a permanent home address. The lender will have to check your home address proof for approving your loan.
- Official Bank Account
Finally, you need an official bank account for getting your same day payday loan. You need to give the details of your bank account to the lender so that you can repay the amount from the same one.
Important Things to Know about Payday Loans
There are a lot of important things that you need to keep in mind while applying for payday loans. They are,
- Payday loans have an incredibly high rate of interest.
- You need to pay huge fees and charges.
- Your credit rating is at risk.
- You must be absolutely sure that you can repay the amount within one month.
- You should not make the habit of taking payday loans.
If you know what to do and what not, the same day payday loan is a great option.