Payday loans are small, short term loans which are usually extended till the next payday. The usual duration of these loans is just a few weeks and such loans are taken to meet expenses till the next payday. These types of loans are typically involve small amounts ranging from £500 to about £1000. Payday loans are also known as cash advance and the interest rate is on the higher side.
The loan process
To successfully apply for this type of loan, a borrower needs to have a steady job and a functional bank account as payday loans are extended on the basis of salary. To repay the loan the borrower needs to issue a post dated cheque or arrange for automatic debit from the bank account to cover the loaned amount and the interest thereof.
In the event of the cheque getting returned for any reason, there will be an extra levy of late charges and cheque bouncing charges besides a levy of additional interest. To help borrowers avoid this type of situation, payday loan lenders extend the deferral facility where the repayment of loan can be deferred by a certain period for a fee if funds are not available for repayment.
In order to convince lenders of your job and salary you might be required to furnish few of your latest bank statement or salary slips. However no credit check is done, thus people with steady jobs but bad credit ratings can apply and successfully get payday loans.
Now with Internet based application process, quick online payday loans have become truly hassle free way of getting necessary funds. You just need to fill up an online form furnishing details of your employment, bank account.
If you qualify on the basis of your salary and job, approval is granted within minutes and money is directly credited into the account within 24-48 hours. In some cases there is not even need of faxing the documents. Thus you can avail of no fax payday loans as quickly as in one day.
Emergencies like unexpected guests, urgent unpaid bills, emergency repair, sudden medical problem in the family etc. come without notice and at times available liquid cash is not enough to cover these expenses.
It can be downright embarrassing to ask from friends or family and if credit cards are maxed out there seems to be no way out. But with payday loans one can very easily take care of such expenses. Following are the benefits of payday loans.
o It is fast thus money becomes available right when you need it.
o It is non fussy and hassle free way of borrowing, which gives it the name no fax payday loans. You just need to fill up the form and you can have the requisite cash next day or so.
o There is no need to go from office to office. You can apply for a quick online payday loan right from your home or office.
o Good credit rating is not a pre-requisite of getting approval. Thus people with bad credit history need not despair.
While quick online payday loans are great way of taking care of sudden expenses, there is danger of falling the trap of debt spiral if it is not managed well because of its high interest rate. To avoid this kind of situation, you should payback the loan as soon as possible.
If you feel you cannot return the loan within the stipulated time, ask for a deferral but don’t make it a habit. Whatever the case maybe, don’t let your cheque bounce as it can have legal repercussions besides hefty late fee and bouncing charges will be levied upon you by the lender and the bank both.