How Do You Qualify For A Payday Loan? The Basic Requirements To Meet

We’ll teach you exactly what a payday loan is.

payday loan
Unsplash Alexander Mils

If you’re in a sticky financial situation that needs to be fixed ASAP, then a payday loan might just be the boon that you were looking for. Payday loans are simple and quick, having the ability to put cash in your pocket as soon as today with minimal fuss. They are also very straightforward to pay back.

In this article, we’ll teach you exactly what a payday loan is. We’ll answer the question of how do you qualify for a payday loan by providing you with the principal requirements that you need to fulfill.

What is a Payday Loan?

Before getting into the requirements for a payday loan, let’s first make sure that you understand exactly what a payday loan is and how it works.

Firstly, payday loans are typically used for low sums of money (usually less than $1000). The idea behind a payday loan is that when you borrow the sum of money you submit a post-dated check that will be repayment of the loan. The check is post-dated after your next payday. The concept being, the only reason that you need the loan is that payday is too far away (hence the term “payday loan”).

Thus, payday loans are paid back in one fell swoop which is in direct contrast to a typical installment loan that you may pay on your vehicle or on your home. The interest rate on a payday loan is reasonable in the short term. But, if you let the debt get out of hand then you could find yourself paying monstrously high APRs (well in excess of 100%).

How Do You Qualify for a Payday Loan?

The first requirement that you will need to fulfill to qualify for a payday loan is having a regular source of income. You do not necessarily have to be employed at a formal organization. But, you must be able to show bank statements or some kind of proof that you are receiving regular income and will be able to pay the loan back in the given timeframe.

Furthermore, payday loans typically aren’t available to those who are already significantly in debt or have previously filed for bankruptcy. Apart from that, the only other requirements are an in-state residential address (or in-province if you’re using this Canadian company), some form of government-issued photo identification, and a phone number.

If you want to secure a lower interest rate on your payday loan, then you should consider putting up collateral.

Is a Payday Loan Right for You?

Now that you know what a payday loan is and know the answer to the question of how do you qualify for a payday loan, you are far better informed to decide whether or not this loan option is the right one for you.

If you fulfill the requirements such as having a regular income, and only need a relatively small cash advance, then a payday loan could well be the option that you’ve been looking for.

For more financial advice, be sure to check out the rest of the articles on the website!

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