(PRWEB) December 23, 2009
So Christmas is here and you need to do some last minute shopping but have no more funds. You think about taking out a payday loan to pay for the presents, however this can start a dangerous practice and is not recommended. Here is a better scenario for responsibly using a payday loan and paying it off in a reasonable time frame. You have found yourself short of money and a bill needs to be paid. You know you cannot avoid it, but you do not have the money to cover it. So you have to choose between writing a check, knowing that you do not have enough in the bank, or not paying a bill that must be paid. It can be absolutely frustrating to be in this sort of situation. Relief for this type of problem can be quickly found, through the responsible use of same day payday loans.
These loans are short-term loans that use your next paycheck as a collateral base. This can be perfect for someone who has found themselves a couple hundred dollars short on a major bill. There is no credit check, no background work, no waiting. You have the money you need within an hour rather than days.
Payday loans are very different from typical bank loans. With a typical bank loan, the amounts are much higher as is the term (length) of the loan. Banks normally base your interest rate on your credit history, risk of the loan type, background, and any other information they may find relevant to loaning money. This does not help you when you are in immediate need. It can take a bank days to come back with an approval or even a rejection. Since they are normally only dealing in larger loans, small loans are often unheard of.
Payday loans have none of these delays. If you work, then you qualify for a loan. You do not have to provide them a credit history, or financial statement. You only need a paystub, showing your employment. They base your loan amount on what you get paid, not any past credit history. This straight forward approach to lending make it faster to get these loans, without embarrassing credit checks. The process is very simple.
When you go to a payday loan, they will ask for a current paystub. This shows them a proof of income and an employer. You show proof of ID as well. They run this information through their computers. The computer checks to make sure that you have no outstanding loans with that company. If you don not, then they will approve you for a certain amount. This is an amount determined by mathematical formula and historical information. It determines how much you are able to pay back within one pay period. If you need more, do not be afraid to ask. A simple call to a controller may get you approved for a larger loan.
Use these loans responsibly and never forget that they are loans. You do have to pay the money back, with interest. Interest rates vary from service to service. You will want to shop around for the best rates in your area. These rates are much higher than a bank, but the amount of money loaned is much lower. You can expect to pay around ten percent or more on a two-week advance. This means that if you borrow three hundred dollars, you will be required to pay back three hundred thirty dollars. The time to pay the loan back is normally on your next payday, or the one following. The terms of the loan will vary depending on the business. These are only meant to be quick loans for emergency. As with any line of credit, make sure you understand the fees and payment schedule.