Short term loans, like payday loans, are a growing business, boosted by the effects of the economic slowdown. With its popularity, lending companies now compete for a greater share of the market. To encourage people to try payday loans, these companies and other private merchants offer minimal eligibility requirements and easy application processes for almost all their loan packages. A borrower is not required to file any documents or information in person in order to complete a loan application. In addition, there are no processing fees, just minimal charges. In most cases, there is also no credit checks involved with the application.
With some lenders, a pay day loan will be received by the borrower in as little as two hours, with the funds deposited in the borrower's bank account. Time during a bad financial situation is a precious commodity, and knowing this, private lending firms are taking special care to make the transaction simple and easy. An application form will take only moments to accomplish and lenders will stamp their approval or rejection in a matter of minutes. Individuals with bad or no credit history can apply for a payday loan which is a regular item in a lender's loan portfolio. Short term cash loans like payday loans are available online, even loan amounts up to $1500 are available.
Paying back a pay day loans is as simple as getting one. On the next payday, which usually is the selected due date, the loan will be repaid through an automatic deduction from the borrower's bank account. The fact that these cash loans are expensive is a given. At the same time, the need for payday loans cannot be denied, as there will always be a time when an individual will be in a financial squeeze. A financial squeeze happens only when there is no money for an urgent need, say a forgotten bill to be paid or an unexpected car repair. If the individual has the money, then the overdue bill or the car repair is not a problem. Therefore, the problem is not the need, but the unavailability of the money.
That is where payday loans come in. The cost may be high, but everything has its cost, and it is up to the individual to judge whether the cost is justifiable. It would be unthinkable if a payday loan is used for a capricious expense, say buying an expensive item or treating friends to a night out. It will be another matter if the pay day loan will be used to avoid a greater expense, say to avoid overdraft charges, late payment fees, or utility reconnection charges.
The requirements for a pay day loan are standard. The borrower should be an Australian resident, of legal age, employed, and with a bank account. Lenders will require a minimum period of employment with the present employer and a minimum regular income. Income is broadly defined to include not only salaries and wages, but also alimonies, child support, pensions, and similar income types. And either a checking or savings account will do, but must be active for a minimum number of months immediately preceding.