When it comes to payday loans, there are several things Americans will want to know about them before applying. They’ll want to know what they are, how they work, how to get one and what the requirements are, as well as the reasons people get them.
What Are They
They are short-term personal loans that are offered by lenders who charge a relatively high interest rate. This is because the expert payday loans for bad credit usually have to be paid back within a very short period of time.
How The Loans Work
The way payday loans work is similar to traditional loans. You find a lender that offers them, and then you fill out the application. The application asks for basic info. If approved, then you pay the loan back either in whole or in payments on a predetermined schedule.
Ways Americans Can Get A Payday Loan
Americans can go to a brick-and-mortar lender or they can apply online for a payday loan. The latter is the more common way and the more convenient way of applying for this type of loan.
States That Have Banned Payday Loans
Due to very high interest rates, a number of states have banned the loans. At the time of this writing, the following states have made the loans illegal:
. West Virginia
. North Carolina
. New York
. New Jersey
If anyone in the US resides in the above states, then lenders are not allowed to give loans to them.
There main requirement is being at least 18 years old or 21 years old in some states. Lenders typically want applicants to have verifiable income coming in regularly and they want applicants to have a checking account. If approved for a payday loan, the proceeds will be deposited into the bank.
Reasons To Apply For A Payday Loan
Many Americans apply for the loans because they need to pay for car repairs or they need a few hundred dollars to pay a car payment. Medical bills or unexpected emergencies are also reasons people get a payday loan. Other reasons include needing cash to pay for everyday bills such as electric, gas, water and so forth.
Cash for a short weekend break, a week long vacation, going out to eat or grocery shopping are a few more reasons Americans apply for a payday loan. Let’s not forget to mention credit is rarely an issue with lenders, which is one of the major reasons the loans appeal to many Americans.
Now you know more about these loans. Compare a few lenders before deciding on who to apply with.