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Do you have a financial crisis that must be resolved immediately? Unfortunately, do you lack the funds to do so until your following payday? If this is the case, you may want to consider obtaining a payday loan, but there are plenty of questions to ask yourself before making the final decision.

 

What Are Payday Loans?

Payday loans, payday advances, and cash advances are generally short-term loans that have interest and other fees attached. Although installment loans are available, payday loans are typically to be repaid in one lump sum on the date outlined in the contract (usually within 14 to 30 days).

 

What Are Installment Loans?

Installment loans are loans that can be paid in multiple parts. This can be useful, but you must also remember that each part will be subjected to the interest rate and other finance fees. In doing so, the total amount owing will be more than what would have been experienced with a lump sum.

 

When Should I Use Payday Advances?

Given their high-risk nature, such loans are best used only for emergencies. If managed correctly, you may also be able to use the loans to help improve your overall credit rating.

 

Are Payday Loans Legal?

The answer to this question will depend upon where you live. In the United States of America, payday loans are legal in 39 states, although cash advances are more heavily regulated in some states than others. Before you start applying for payday loans, it is best to find out more about the industry in your local area.

Where Can I Find a Reputable and Legitimate Lender?

You can easily find reputable and legitimate lending companies online or from the phonebook. You may even have local offices that you can visit. However, if you want to get the quickest result, you may want to consider looking online.

 

Am I Eligible for Cash Advances?

To be eligible, most lenders will require that you:

 

  • Are 18 years of age or older
  • Have steady employment or another source of steady income
  • Have a savings or checking banking account that meets their specifications

 

How Much Can I Apply For and Receive?

The loan amount you are eligible for will vary in accordance to your state legislation and individual lenders. For most people, the amount will fall between $100 to $1,500 in total. Although you may be eligible to receive more than you have applied for, it is highly recommended that you only accept the bare minimum that you require.

 

How Are the Made Funds Available to Me?

You can receive your money as a check, cash, or an electronic deposit, depending on the individual lender. If you are working with online companies, you will typically receive your money as an electronic deposit into your bank account.

 

How Fast Can I Receive My Money?

Many lenders will state that you will have your money within 24 hours, but you should be wary of this. In many cases, the timeframe refers to how fast you will receive your money after your application has been processed and approved. Furthermore, if you send in an application after hours, during the weekend or on bank holidays, you can expect a delay.

What If I Have Bad Credit?

If you have bad credit, you can still obtain personal loans through lenders that deal with high-risk borrowers or do not require credit checks. Although this can be very beneficial to those that cannot get help elsewhere, the rates encountered will be considerably higher. Because of this being coupled with the short repayment time, many borrowers may find it difficult to pay their debt on time, which will only result in even more debt.

Are Extensions Available?

The availability of extensions will depend on your state legislation and the individual lender. When you “roll over” a loan, just remember that you will still be gathering additional debt through the interest and finance fees. That is why it is important not to abuse short-term loans.

What Are Alternatives to Payday Loans?

Because payday loans can be potentially dangerous, before you consider one, you should look at your alternatives. Such alternatives may include:

 

  • Borrowing from friends or family members
  • Checking with your bank for a traditional loan
  • Checking with your credit card company for a credit card loan
  • Organizing a flea market to sell unwanted items for cash
  • Pawning or selling your items at local pawnshops
  • Taking on a second job

 

As you can see, there are many questions to consider before taking out a payday loan. Once you have thought through these questions and more, you will be better equipped to decide if taking one out is the right choice for you.