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Payday Loans: Responsible Lending and Borrowing

payday loans or not

Payday loans are a great source for quick cash when you need a little extra until you receive your next paycheck. Particularly, many people use them to help cover an emergency cost or make up for too many unexpected ones. The loans are provided quickly without the burden of proving good credit as with bank application procedures. Applying for a payday loan through a store or simply filling one out online will not take much time out of your day. In addition, approval status is known within a couple of minutes once you have provided the lender with the qualifying information.

Can You Pay Back the Payday Loans?

Because these cash advances are small loans, the pay off is expected by your next paycheck. A responsible lender will verify your bank account, ensuring that you can afford to pay the loan back on time.

Responsible lenders will look for:

  • paychecks electronically deposit
  • qualifying income
  • good standing with past payday loans

payday loans online

No Credit Bureau Check Payday Loan

When a lender has taken the time to verify the information, good lending practices are in place to prevent the borrower from defaulting on the loan. A payday lender will loan money out to those without good credit, bad credit, or no credit. There is no credit bureau check done. Payment is expected on time. Most times if you are not approved for a payday loan it is because you have defaulted on a past payday lender or the applicant had too many NSF’s, high negative balances for a long time or there is a bankruptcy in your history. 

What Else is Needed for a Cash Advance?

The cash advance application is simple and takes a few minutes to complete. Your bank information is necessary so that the payday lender knows where to deposit your funds electronically when you are approved.

A responsible borrower will provide accurate:

  • banking information
  • contact information
  • pay cycle dates

Being a responsible borrower, genuine good intent to pay back the loan helps make the loan a more successful transaction.

Fast Money Calls for Higher Interest Rates

It should be noted that trouble begins for borrowers who are not honest on their applications. Payday loans are easy money opportunities for those in need of quick cash. Indeed it is a loan business that has softer lending restrictions than banks. Those who are in major financial trouble will not be able to correct their status with a small short term loan. The snowball effect will keep the customer rolling over the loan, paying additional fees and much higher interest rates than other bank loan types. The payday loan companies need to keep their fees higher since the loans are small and are meant to be paid back quickly. The rates are a great incentive to keep the payoff high on the budget priority list. A business that provides fast cash with limited criteria expects the customer to withhold their part of the contract.

Think Twice Before You Borrow

Debt consolidation will not be solved using cash advances. Most people have debt that runs into the thousands of dollars, while payday loans are for much less. If you find a payday loan lender willing to lend thousands, then you are not dealing with a responsible lender, and you should take your business elsewhere. Taking their money will make both parties irresponsible. If you cannot afford to pay it back quickly, payday loans are not for you.

Payday Loan or Debt Consolidation?

To be successful with your budgeting, you will want to maintain a proper balance between income and spending. Payday loans are good options for small loans that will get you out of a financial situation that can be rectified with your next paycheck. Using a cash advance to take care of bigger debt problems will only put you further in debt. In this case, you might want to look up a debt relief company.

Spotya! is a servicing company that understands good people fall into bad financial times. We enjoy helping people out of financial crunches to get back on their feet without long term consequences.

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