Wednesday, June 17, 2015

Six Tips for Applying for a Payday Loan

Life can curve balls at us which may leave us needing a bit of financial help from time to time. From sudden medical expenses for home and vehicle repairs, a short term or payday loan is often a quick and easy answer to life's little surprises. If you are considering applying online for short term loans, there are some tips that you should keep in mind to best guarantee your chances of not only getting approved, but being able to manage the loan.

Proof of Employment

The beauty of applying for a short term loan is that it is quick and seamless as long as you are properly prepared. Unlike applying for a loan from a financial institution, companies which offer short term loans have a quick application process which largely relies on one being able to have proof of employment. Some ways you may be able to prove your employment status include:

  • Tax forms
  • A signed letter from your employer 
  • Providing your National Insurance number 

Having recent proof of income from your employer may also be acceptable as a sole piece of proof of employment. This would include items such as a pay stub from your place of employment. Ask the loan company if the length of time you have spent with the employer will have an impact on your application as well. Typically short term loan outfits will only lend money to individuals if they have been working at the same place of employment for 3 months or longer.

Understand what the Loan Is

Short term loans are significantly different than a long term loan. This should be well recognized and accepted before the application process. Ideally, this type of loan will only be used to tide someone over should they find themselves in an emergency situation before they receive their next pay check. 

Do Not Apply for Multiple Loans

Payday loans are quick and easy. Many will hear back within hours after the application process whether or not they have been approved. Even if you are well-intentioned and trying to improve your chances of being approved, apply at one loan location at a time.

These companies have the means available to track every single loan request you make. If they see that you have made multiple loan requests in a short period of time, they may think that you are:

a) Trying to scam them; or
b) Will receive so many loans that you will not be able to pay them back on time, if at all.

Avoid Start-up Fees

Any payday or short term loan company which charges its clients a start-up fee should be avoided at all costs. Legitimate loan providers do not require any fees from you. They receive payment by other means.

A payday loan is a small, short-term unsecured loan, "regardless of whether repayment of loans is linked to a borrower's payday. The loans are also sometimes referred to as "cash advances," though that term can also refer to cash provided against a prearranged line of credit such as a credit card. Payday advance loans rely on the consumer having previous payroll and employment records. Legislation regarding payday loans varies widely between different countries and, within the USA, between different states.

Be Honest about Your Finances

The best way to protect yourself when taking out this type of loan is to be honest. There may be some unattractive details about your past or current financial state which may cause a loan company to reconsider lending you money. But being honest will help keep you financially afloat rather than unexpectedly drowning in debt.

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