If you have found yourself in a tricky financial situation then you may be thinking about contacting a lender or broker help you borrow money online. One form of borrowing that allows you to get cash fast in the US is payday loans; these short term loan options are designed for those who need just a bit of extra financial help before their next payday. The idea is that the borrower will receive the money they need from the lender and then, when they are paid by their employer, they pay back the loan as well as the additional interest.
These are short term, unsecured loans that you pay back in installments or simply in one go at your next payday. Payday loans can be helpful if you have incurred a large unexpected cost such as car repairs or medical bills.
Borrowing as little as $100 can help you get out of trouble financially and allow you to feel less worried about paying those bills that need to be paid, payday loans are available to you even if you have a bad credit history.
However, a payday loan might not be right for everyone and there are certainly some things to consider before applying online for a payday loan. Making sure that you will be able to repay your payday loan is of the utmost importance before filling in your application. You should also have an idea of how much money you need. For example, whether you need a $500 loan or a $1000 cash loan will in part determine the type of loan you need and will of course determine how much you need to repay and over how long.
This guide takes you through whether a payday loan is right for you and what to consider before getting a payday loan.
What To Consider Before Getting A Payday Loan
As mentioned, it is important to consider a few details before deciding to get or apply for a payday loan. Some of the things you should consider are:
- Alternatives – Have you looked at alternatives to payday loans such as borrowing from family and friends to see if that would be suitable in your financial situation; or looked at other types of loans such as secured loans?
- How much you need to borrow – It is important to understand how much you need to borrow, as payday loans are designed to be smaller loans. Therefore, if you are looking to borrow $600 or perhaps $1000 a payday loan may be right for you, but if you need to borrow more it might be worth looking into different types of loans
- How long you need to borrow for – If you need to borrow for longer than a few months then you should not get a payday loan, payday loans are designed to be short term loans rather than longer term solutions
- Borrowing money for the right reasons – Make sure that you are not borrowing money in order to just spend it on luxury items and things that are not absolutely essential. A payday loan should be used to pay off essential bills and expenses so that you are not worried about your financial situation and serious consequences
- Make sure you can repay – It is of the utmost importance that you make sure you can repay your payday loan before applying for one because there can be consequences when it comes to not repaying your payday loan on time
Am I Eligible For A Payday Loan?
If you are interested in taking out a payday loan in the United States, you must check that you follow these eligibility criteria to be accepted for a payday loan before you apply. Different lenders will have slightly different criteria to lend you money and you should look at what any lender requires in order to let you borrow money, in advance of applying for any loan, online or otherwise.
You are eligible for a payday loan in the US if you are:
- A U.S. resident
- Over the age of 18
- In steady employment with a stable income
- Earn a minimum of $800 per month ($9,600 per year)
- Possess a valid mobile phone account and number
- Possess a checking account for the loan to be deposited (if approved)
- Able to afford the loan repayments
- Live in a US state that allows payday loans (such as Texas, Florida, Nevada and others)
Can I Get A Payday Loan If I Have Bad Credit?
It is possible that you may be struggling to get a loan from a high street bank or lender if you have bad credit or a bad credit history. Sometimes however you may well need the money in order to cover an emergency expense and in times like these, being able to get a payday loan or other form of unsecured credit can make a big difference to your financial position as well as that of your family. Knowing what you should and shouldn’t consider using a payday loan for is very important so that you don’t find yourself applying for loans you don’t need.
Payday loans can be helpful as you can in some circumstances get a payday loan even if you have bad credit. If you are eligible for a bad credit loan it can help you get the money that you need when you need it and you can then pay the loan back on your next payday.
The options may be slightly more limited if you have bad credit and you may be facing loans that have an higher APR because of your credit history but bad credit does not mean that you are not able to get a payday loan in the US.
It is vital, however, that you make sure you will be able to repay your payday loan with bad credit because you may face consequences such as going to court if you do not repay your lender on the time agreed.
When Should I Avoid Payday Loans?
Although payday loans can be incredibly useful and helpful, they are not meant for everyone and are certainly not meant for every circumstance and expense. There are circumstances where you should avoid payday loans and where getting a payday loan is likely to be a bad idea which could end up costing you more money, leading you into further debt or unnecessarily spending money you don’t need to.
You should avoid applying for payday loans if:
- You can find alternative sources to lend you the money; such as friends and family or another, existing credit provider
- Your state does not allow payday loans and if such loans are not legalized in your state
- You intend to spend the money on luxury items like a holiday or expensive car
- You have savings you can utilize instead of a loan
- You don’t think you will be able to repay the loan once you receive the funds from the lender
- If you can wait until your next payday to alleviate the financial issue (and it is not too pressing)