Life is very unpredictable, everything in life changes along with time; poverty, richness, happiness, sadness, etc. A situation might come when you might need some money for a short time frame but somehow you do not have that money. Some people manage money from friends, acquaintances, relatives, neighbors, etc. but it is not possible for everybody to manage or lend money from other people. Also, the situation might be such that you cannot ask or even they might not have money at that particular time. The money lending business companies rescue such people out of these situations by allowing them to take a payday advance. It is the breather provided to the borrower by the lender. So, it is always advisable never to lose hope and do proper research and gather knowledge about the different sources from where you can get short term loans.
What is a Payday Advance?
A payday advance is also called a payday loan, small-dollar loan, salary loan, etc. and it is given by the lender to the borrower for a very short period of time. The loan is given on the basis of the income and potential of the customer to repay the loan. The concept of payday advance is basically the lender who will provide the borrower with the loan amount equal or closely equal to his salary or wage. But these loans are charged with heavy interest. Previously, some companies used to take advantage of the situations of such people and levy exorbitant interest. To restrict that Annual Percentage Rate has been introduced which has to be followed by all the company and if not followed then legal actions can be taken. It is nothing but the maximum rate of interest that can be charged is fixed by the judiciary. The lenders can charge below it but not above it.
Eligibility Criteria for Payday Advance
There is minimum paperwork and criteria for getting a Short Term Payday Loan which are as follows:
- Only a citizen of the United States of America can be considered as the lender.
- The legal age in the United States of America is 18 years. So, the lender has to be 18 years or above in order to get a loan. So, the lender has to provide age proof.
- Since the very concept of a payday loan is to provide you with your salary as a loan before actually getting it, so you have to show your source of income, and based on that your loan will be sanctioned.
- Submission of your Social Security Number is required to extract all the details they require to give you the loan.
Who Goes for a Payday Loans?
Payday advances are taken by the people who do not get a loan from other places or from known people that also have a low amount of loans, people turn to the banks. These people generally do not get loans from other lenders because of low credit score and the credit score is low because of the following reasons:
- If the lender fails to pay any existing monthly installment of any kind loan.
- Failing to pay for the credit card hits badly at the credit score so at least pay the minimum due if you cannot pay the full due amount.
- Another reason can be that the customer might not have taken a loan from the bank ever and also does not maintain the minimum account balance properly.