Payday loans are a reasonably new type of funding option, designed specifically for people who have an immediate need for money but who have bad credit. However, you need to make sure that you know exactly what you’re getting yourself into.
What Is a Payday Loan?
There are many different types of loans out there, and the payday loans direct lender options are just one of many. Basically, it is a type of unsecured loan that you can use to meet any type of financial emergency. It is paid back from your following pay check, often just a few days or weeks later. As such, it is a loan that you will only have for a very short period of time.
Are There any Limits?
There are some limitations on what a payday loan can and cannot do. First of all, there are no limitations in terms of what you can do with your loan. Whether you want to use it because you have a genuine need for immediate cash or because you need to pay your rent is entirely up to you. There are limitations, however, on how much you can borrow. This generally depends on how much you earn each month.
Can I Get a Payday Loan?
There are a few criteria in terms of how whether or not you can get a payday loan. These include:
- You must be a permanent resident of the country.
- You must be at least 18 years old.
- You must be employed or have another form of guaranteed monthly income.
How Do I Apply?
In most cases, you can apply for a payday loan online as well as cash advance apps. There are a number of high street branches that you can go to as well, but most people prefer the online option, as it is quicker and easier. Only very little documentation is required, as no credit check will be done either.
How Much Does it Cost?
This is where it gets a little bit complicated. A payday loan is, technically, a very expensive type of loan. The APR is incredibly high and can run into the thousands. However, because you only have the loan for a very short period of time, you don’t actually pay all that much interest. You can expect to borrow $1,000, for instance, and pay back $1,250 over a period of 30 days.
How Long Will my Loan Last?
Generally speaking, a payday loan will last from the day of you receiving the money until your next payday. However, many lenders now move that onto the payday after that, and some even have longer periods of time. It is also sometimes possible to defer your loan for an additional month, in which case you only pay the interest. However, this is where a payday loan becomes expensive. On the same $1,000 loan, for instance, if you were to defer it for three months, you would end up paying $2,000 back in total.
