Payday Loans – Quick Cash And Other Options
Want to borrow $2,000 or less? Check your options
Do you need money in a pinch? You may want to consider a payday loan, or quick loan. Here, we will explain how they work and outline your other options.
- What is a payday loan?
- Alternatives to a payday loan?
- Who can get a cash loan?
- What does the loan cost?
- What to do if you have an issue with your loan
What is a payday loan?
Payday loans are high-cost, short-term loans. They include loans of smaller amounts (up to $2,000 which must be repaid anywhere from 16 days to 1 year from the date it’s loaned to you), as well as borrowed loans of longer periods of time.
How do you make repayments?
Typically, cash loans are repaid through:
- Direct debits from a bank account, or
- A deduction from your pay
Loan repayments will usually be deducted on the day you are paid, so make sure you have adequate funds in your bank account to cover your payment along with your other expenses.
Alternatives to a payday loan
If you’re in need of money, there are cheaper alternatives to a small amount loan:
- If you’re struggling with paying your electricity, gas, water or utilities, contact your utility provider and negotiate with them. Many companies will have hardship options that help you make a payment plan through installments or delaying your payment until the next due date so you don’t have to go without essentials.
- Community initiatives often have reserve funds for those who qualify for hardships. Check your local community listings for non-profits and charities that provide funding for essentials for residents and neighbors in a time of need.
If you do decide to take out a small loan, be sure to shop around with different lenders. Evaluate their fees and interest rates to make sure you get the value you need without creating more hassle and larger repayments.
Who can get a cash loan?
Creditors are required by law to lend money responsibly, which means they may not lend money if you don’t meet the standards that prove it’s suitable for you.
There are some situations where you may not qualify for a short-term, small amount loan:
- You’ve had other, multiple small amount loans within the past few months.
- You are spending all of your money each pay day and don’t have the margins to pay other expenses.
- You have defaulted on another quick loan.
What’ you’ll need to provide the lender
Bank account statements
The creditor will ask you for the previous 90 days of bank statements to calculate your income. If your income comes into multiple accounts, you will have to provide the last 90 days of statements for each account.
They don’t have to be paper statements. They may accept statements printed from your online banking account, but they may ask for other details that verify your role as the account holder.
This information allows the creditor to see if you can meet the repayment requirements.
Other documents
Lenders must check your financial situation before they extend any credit to you. They may also ask for the following:
- Pay stubs from your job
- Copies of your current bills
- Copies of other credit accounts that you make repayments to
- Any rental or mortgage statements that show you are current on your rent or mortgage expenses
- The number and type of documents may vary, based on whether or not they’ve leant you money in the past, your credit report, and any information contained in your bank statements.
What will the loan cost you?
The fees and charges associated with payday loans may vary. Depending on jurisdiction, there may be a cap on the annual percentage rate (APR) associated with the loan. The common rates in the United States range from 36-40%
What to do if you have a problem with your loan
If you believe you’ve been charged too much for a loan or that you’ve been given an unsuitable amount of credit, talk to your creditor or find any local nonprofits that help with credit counseling.
A payday loan may be a temporary solution, but it’s not always the right solution because of the fees and interest associated with them. Be sure to compare your options to make sure it is the right fit for you.
