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A Payday Loan Can Save the Day

Written By renie kolo on Wednesday, March 6, 2013 | 4:00 AM


You've got it all figured out... where every dollar of your paycheck is going to go each month to pay your bills and buy necessities. Like a lot of other people, you may be living paycheck to paycheck. If there is one unexpected expense, your carefully thought out plan is suddenly incapable of covering your needs. A quick way to get cash in case of an emergency is to get a payday loan.

A payday loan, or paycheck advance, can help you pay your bills, fix your car, and so much more. You're basically borrowing against your next paycheck, then paying the loan company back with a predetermined amount of interest. The loans are short-term, usually with a payback expectancy of about two weeks. Companies can choose the maximum payout, typically from $1500 to $2500, and most will provide you with your cash the same day.

Another advantage of a payday loan is that they usually don't run credit checks, so if your credit rating isn't as high as you'd like it to be, you still have a good chance of getting your loan. If you go to a payday lending store, you'll need to take your drivers license or official identification as well as your last few paychecks too, as proof of steady income and how much you are regularly paid. You'll need to take along a post-dated check made out for the amount of the loan plus interest to leave with the loan officer. When you receive your next paycheck, you return to the store and pay the loan off. If you don't show up, the loan store can cash your check. Make sure the money is in your account to cover the check, or you could end up with additional bank overdraft fees!

If you decide to apply for a payday loan online, you may need to fax information to the company. This includes bank account numbers, your social security number, recent bank statements, employer info, a copy of a check, and any paperwork the loan company requires you to sign. The lender then deposits your loan amount directly into your bank account, and withdraws the amount plus interest on your next payday. Many online loan companies don't run credit checks or verify your income.

Shopping around for a loan company with the lowest interest rates and best terms for your needs is critical, whether you call the payday lending stores or look them up online. Most companies are limited as to how much interest they can charge because they are ruled by legislated rate caps. This prevents them from collecting an exorbitant amount of interest when you repay the loan. Although you could get a lower rate at a bank, credit union, or other loan company, a payday loan is available faster, and paying the amount of interest is going to be less expensive than paying your utility company to turn your electricity back on if you can't pay your bill.

A payday loan may be able to help you with a quick fix in an emergency situation if you use it wisely!

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