Category: payday loans

How an instant payday loan works

If you are looking for a short-term cash injection – say $200 to tide you over until your next payday – what are your options? There are different ways of borrowing money depending on your needs and circumstances. For example, there are secured and unsecured loans; credit cards; and there is an instant payday loan. The following may help you find the most suitable solution for you.

Secured and unsecured loans

The secured and unsecured loan both offer ways to borrow cash – typically involving larger sums ($500 – $1,000 upwards for unsecured lending and from around $5,000 – $10,000 upwards for secured). With a secured loan you have to provide an asset as security for the amount borrowed, and this is usually your home. The idea behind a secured loan is that if you fail to meet your loan repayments, your asset can be seized, sold, and the outstanding monies recovered. Obviously, with short-term smaller amounts of cash needed, a secured loan would not be a suitable option for you.Both types of loan allow you a set period of time to pay back the money you owe and a typical loan may be taken out for anywhere between 1 and 10 years, often longer for the larger, secured amounts. Arranging either form of borrowing can take several weeks so would not help you if you need cash urgently, even with unsecured lending.

Credit cards

Credit cards are a form of borrowing, with you paying back what you owe at the end of every month. If you are unable to clear the balance at this time, you will normally have a minimum amount that you will need to repay which will include any interest.

If you have credit remaining on your card, you may be able to withdraw a cash amount. However, you will usually face a handling fee (typically around 3% of the amount withdrawn or a minimum of $2-$3), plus interest charges. These interest charges will normally start to accrue from the day you draw the money out.

While this may sound easy, do bear in mind the way that some credit cards are structured. With many credit cards – but not all of them – if you fail to repay the full amount outstanding every month, then typically any repayments you do make may go towards the cheaper debt first (such as purchases made on your card), leaving you paying higher interest on the cash amount. This could work out expensive in the long-term.

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With a payday loan you typically borrow a small amount of money which you repay in one lump sum, usually when your next payday arrives or the one after.

Lenders set a limit as to the maximum amount you are able to borrow, with a typical amount being around $500 (though you can often borrow higher amounts once you have borrowed and repaid a payday loan).

A payday loan is typically borrowing for the short-term – typically to meet emergencies when you are unable to stretch your income (eg for car repairs; vets’ bills; a domestic emergency etc). If you apply online, and get approved, the money could be in your bank account within two hours – or the next day at the latest. The amount you will need to repay on your instant payday loan will be agreed at the outset, so you will know exactly how much the payday loan is costing you.

Instant availability of finances for your emergency needs

There is not everyday that you come across certain unexpected needs, such as medical emergencies, immediate house or vehicle repairs, credit card bills, electricity bills, child’s school or examination fees, etc. But, when you are going to face them, make sure that you are well prepared in all respects. By this we mean that you should have adequate amount of money to tackle them, which can be provided by the same day loans option. It can assist you in such a manner, so that you are able to pay off your all urgencies quite well on time. These funds are available within a very short span of time of about 24 hours on just the submission of a filled online application form that too without any faxing hassles.

Loans within a day can provide you cash support up to a maximum of $1500 for a short term of about 30 days. The repayment of this amount can be done without taking any tension once you adjust the repayment date with your payday. After doing so all your payable amount will be transferred to the lender on your payday from your bank account. This collateral free scheme does not involve any credit checking process.