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. Selling of household goods such as furniture or electronic goods is an option taken by some people. For others, the needed money can be gotten by obtaining loans. Here we focus on the people who use loans for the needed cash.
One of the most common types of loans is the payday loans. Though the loan comes in many different names such as salary loans, payroll loan or even short-term loans, the names refer to one type of loan. 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. This, therefore, means that documents such as your paystub or bank statement may be required. There, however, are other firms and individual lenders that use different means of verifying your details of employment. These methods used to confirm your details should not worry you as their main aim is to check if you qualify for a loan and if you do, how much you can 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. You will be required to write the lender a post-dated cheque if you do manual loan application by filling the loans application papers. Once you pay back the loan, you can get your check back. Failure to pay back the money leads to the lender cashing the cheque to obtain the amount you owe him. 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.