A payroll loan is popularly known as payday loan. It is a kind of short-term borrowing that involves borrowing a small amount of money at a relatively higher rate of interest. The borrower would need to hand over a post-dated check for an amount he wishes to borrow along with the fees. The payroll loan lender would be holding onto the check until the date agreed upon by both the parties, usually the next payday of the borrower. These loans are also referred to as cash advance loans.
What is the purpose of payday loans?
Payday loans are actually designed for individuals who require fast cash before the payday in the next month. The purpose of these loans is getting speedy, easy, and convenient cash for taking care of emergencies of life.
A payday loan is supposed to be a high-interest, short-term loan. The loan amount usually varies from $50 to $500. You could obtain a short-term loan like this from a trustworthy pay day lender. Payday loan companies usually, provide convenient financial services like utility bill payments, foreign currency exchange, and license processing.
What does payday loan processing entail?
The pay day loan processing is pretty simple and easy. Here are the few easy steps.
- First of all, you may visit a payroll lender. There are numerous payday loan stores where you could go seeking the amount you need on an emergency basis. Alternatively, you could present your application online or you could call and do the needful. Many lenders insist on doing the entire business strictly online.
- Next, you need to submit an application. It does not necessitate complicated details and you must know that it is certainly not a bank loan application. Generally, the application would be containing basic information like contact details, banking information, and employment details. The lender sometimes would ask you to provide contact details of your friends or relatives. The lender would be calling up these references to checkout your credentials and in the event you are trying to evade payback.
- Once the application is submitted and it has been approved, you simply need to write out a check for the exact amount you require plus the fees in the form of an interest payment. If you are applying online you need to promise to pay the full amount with interest or the finance charges, within a stipulated time.
- Once you handover the check, the lender would at once be depositing the loan amount to your bank account or may handover a check to you depending on the convenience of both parties involved.
- The lender would be holding the check written by you until the agreed upon or specified date. Mostly two weeks are allowed or until payday.
- On the specified timeline, the payday loan company would be cashing the check or the amount is debited from your bank account. This way your loan would be repaid along with the lender’s fee.
- Roll over the loan if you are not in a position to cash the check. This could be done for another term with extra fees.
People are attracted to payday loans mostly because of their ease, speed, and convenience. They are great in terms of flexibility and they are found in various locations and they operate for longer hours as compared to banks and other financial institutions. The payday loan lenders are not at all concerned about your credit rating or credit history. They are highly popular as bad credit lenders and are admired because of the expediency and privacy of the process involved.
Author Bio: Kevin Smith is a finance consultant and blogger. His blog posts are very interesting, informative, and helpful. He offers financial tips about bank loans, credit card loans, ways to tackle pay day lender, etc.