What Does Obtaining a Payday Loan Entail?
In cases of emergencies and unforeseen expenses, having to wait for payday may be impossible. It is at such times that a person is required to use other means of getting money. For some people, selling household goods such as furniture and electronic goods is the way to go. Obtaining a loan is the other method used by people to get cash. Our focus here is on those people who get the money by use of loans.
One of the most common types of loans is the payday loans. The loan comes in different names such as the salary loans, payroll loan or even short-term loans but all refer to one thing. The payday loan is a loan for employed people and is given on a short-term basis. The fact that the borrower is expected to pay the loan on his payday is what gives this loan its name. For employed people who need cash and are thinking of getting a payday loan, here is some crucial information you should have.
The first thing you need to know about these loans is that you only qualify for the loans f you can show proof of an employment salary. Bank statements and pay stubs are some of the documents the lender may require as proof of your employment. The individual lenders or businesses can also use other different means to confirm your employment details other than using those documents. Whichever the method the lender uses, you should know it is aimed at establishing your qualification for the loans as well as the amount you should get.
Though the payday loans are referred to as unsecured loans, the lender has to have some assurance that they will get their money back once you are paid. In the case your loan application is done manually by filing papers, the lenders will require you to write them a post-dated cheque. Once you pay back the loan, you can get your check back. The lender has the right to cash the cheque and obtain his money if you fail to pay back the money. If you make an online application for the loan, the assurance the lender gets is by you authorising an automated remittance of the money once your account gets your pay deposit.
Something else you need to know is the interests charged on the payday loans. Due to cases of some firms charging exorbitantly high-interest rates on the loans, the government through the tax agencies put a rate on the interests to be charged. In Australia today, the interest rates for payday loans stands at twenty-four percent per month. A firm or an individual lender, therefore, charging anything above this interest rate is running his business against the lending and borrowing regulations.