Most of us have heard the terms payday loans, payday advance, and auto title loans but without the understanding of the similarities and differences between different types. Even people who have never run short on cash before may find themselves with debts that they simply can’t cover and have to learn the details of how to get the details about payday advances in a hurry. These are some of the details you need to know in case you ever get in a financial jam.
1. Payday loans are considered short-term, which usually means they are for a two-week period or longer. If you normally get paid every week or two weeks, your loan will typically have to be paid back on your next payday after the two week period has passed.
2. The normal requirements for getting a payday advance are an active bank account and some regular source of income. When getting a payday advance online, once the bank account is verified and the loan is approved, the money is deposited directly into the account, usually by the next day. When the time comes for the re-payment, the money is withdrawn from the same bank account. For payday loans that are made in physical stores, the applicant is required to take at least one bank statement and proof of their income. The lender will pay the applicant with cash or check and they are usually required to come back into the store to make their payment when the due date arrives. For both methods, the fees for the loan are paid back on top of the amount of the loan when repayment is due.
3. The average amount that people borrow from a payday advance is under $400 and the maximum amount is usually $500. The amount you are allowed to borrow will be determined by your income, not on your credit. Payday loans are not based on credit ratings like other types of loans. If you have poor credit or no credit, you don’t have to worry about being turned down due to a credit check.
4. People from a wide range of income brackets and from all walks of life use payday advance loans as a means of getting fast cash when they need it. There is no specific “type” of person who is more likely to get an advance on their payday. It is all a matter of needing cash before they can get it by other means and/or without the financial burden that other resources can put on them and their credit.
5. Auto title loans are a type of payday loan that allows you to use your car title to borrow money. All vehicles do not qualify for this type of loan, with limits on age, type, value and other factors that will determine whether you quality and how much you can borrow against the vehicle. You should never borrow more money than you know you can pay back to prevent losing ownership of the vehicle.
Payday loans are a practical solution for a large number of people at least once in their lives. Using when needed and not abusing the loans makes the difference in whether they can help you out of a tough situation or cause you to get into one.