There is a lot of talk around payday loans but a lot of people don’t actually know any important detail regarding them. For instance, the amount of money they can borrow and how much time do they have to pay it back. Just like consumers have different needs and abilities, in the same way payday lenders vary in the services they can provide. Here are a few pieces of basic information you should know if you consider to apply for one:
The amount of money you can borrow
Every lender has his own limits, procedures and processes. Because they don’t really care about your credit score, they need to know you monthly income and if it is stable, to make sure you can repay the funds that you request. In a sense, the more money you are making each month, the more money they are willing to lend you. It will help your chances if you have been working for the same employer for a fixed amount of time, usually 3 months is more than enough though some lenders can be more lenient regarding it.
The term initial loan states the amount of money they are willing to provide you with, if you are borrowing from them for the first time. Later on, should you find yourself in a need for another loan, they will increase the maximum amount they can offer. If the borrowing and repaying process runs smoothly, they can increase it even more and maybe the time available for repayment become open for discussion as well.
If a consumer needs a relatively larger amount and she or he should do a little research and find a lending company that can offer a higher initial loan.
The length of repayment period
As the term “short-term loan” implies, the funds borrowed are expected to be repaid in a short amount of time. Usually it is about two weeks. By that time the lending company is expecting the full repayment of the loan plus the fees. However there are lenders willing to extend that period of time with the use of installment loans. This type of payday loan has qualifying criteria same as the usual payday loans and offer the same amount of money as well. The repayment is broken down to smaller amounts and some lenders even offer an interest rate much lower than the one traditional payday loans have.
Most loans of this kind offer a period of time about 45 to 90 days. In some cases you can find a lender willing to go for as much as six months, however there aren’t usually willing to go beyond that.
The easy criteria and the quick response from the lending companies are mainly the reason short term loans are so popular in this day and age of economic instability.