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Mortgage, bills, a sudden car accident, a long-delayed vacation, and no funds. Now what? If these stress problems sound familiar, why not throw them out with funding that helps you make all those necessary payments until you cash in your next salary cheque?
In situations like these, there’s nothing better than an online loan. Taking that, a payday loan just to keep that bank balance maintained or take out cash immediately sounds like a great plan. However, there’s more to payday loans than meets the eye.
If you’re squeezed in financial constraints and need to stay afloat till your next payday, a payday loan sounds like the right type. Searching payday loans online at the site of WeLoans, which is an online broker, would be your ideal choice for your financial situation.
What are Payday Loans?
A payday loan is a short-term loan, usually lent for a few weeks up until an individual’s next payday. For starters, it’s an unsecured loan type, meaning there’s no need to attach a valuable ownership to the loan as collateral in case you’re unable to make repayments.
As for the loan range, that depends on the lender, but most payday loans are only for amounts within the $500 range. If you need to look for a payday loan that offers more, WeLoans can help you out with payday loan amounts up to $5,000.
Need more help regarding payday loans or even other loan types? WeLoans’ financial writer Nabila Yusuf has extensive information on the subject and tons of articles that can guide you through various financial queries
Factors to Consider when Choosing Payday Loans
Before rushing towards anything, especially when finances are involved, you need to evaluate your options carefully.
While payday loans seem like an ideal option to get out of financial trouble, there are certain factors that you need to know and look into prior to finalizing a deal with a lender. We’ve highlighted them below:
Costs and APR
Payday loans, due to their short-term, one-time, and unsecured nature, come with incredibly high interest rates and fees. In fact, payday loans are one of the most expensive loan types available.
The general rule of thumb for lenders is to charge anywhere between $10-30 per $100 loan amount. With an almost 400% APR, the higher the loan amount, the more the interest. Besides that, lenders also add fixed charges associated with offering the loan.
Limited Loan Amount
Once again, payday loans are usually considered a way out on rainy days. Therefore, you can only borrow money under a payday loan up to a specific range. Each lender has its own payday loan range.
Some lenders may only offer payday loans up to $500, while others may go to $1,000. To find a lender that provides as much as $5,000, apply through WeLoans.
State Laws
Despite finding US-based lenders, you may not be eligible to borrow a loan depending on state laws.
As of now, there are 13 states where you cannot borrow a payday loan because of their high interest rates. Meanwhile, other states have set a maximum loan amount, such as Alaska and California, where you can only borrow $500 and $300, respectively along with maximum interest rates and specified minimum and maximum loan periods.
Due to this, most online lenders don’t operate in areas where payday loans are prohibited or restricted. Check your state’s payday lending status before applying.
Short Repayment Duration
Generally, payday loans have shorter repayment deadlines than other loan types, such as installment loans, title loans, etc. If you’re applying for a payday loan, the deadline should be clear-cut, and you’ll need to stick to it.
Normally, payday loans need to be repaid on your next payday or within 4-6 weeks after getting the loan. Alternatively, other loan types allow you to repay the loan within a few months, and some might even go up to 3 years.
Choosing the Right Lender
The most crucial factor for deciding on any loan, let alone a payday loan, is the lender. With
increased competition as well as scammers in the market, a lender can make or break your payday loan experience.
Look for licensed payday lenders only. It’s best to avoid any lender that claims to be licensed and can’t prove it. These lenders will put you in more debt or at risk of fraudulent charges. Also, apply for a payday loan with WeLoans; the platform has reputable and licensed lenders across the US.
Managing Repayment
Are you sure about getting a payday loan by now? Consider the repayments before the final process. Payday loans need to be repaid as a one-time lump sum instead of partial repayments on a monthly basis.
Revisit your loan amount and think about whether you need it and can repay it timely; otherwise, you’re signing up for incurred debt.
Once those elements are definitive, you’ll need to make a repayment plan that sets aside the loan amount along with the APR and fee by the due date. You can also set up auto-repayment that allows the lender to deduct the amount from your linked bank account on the due date or your next payday.
How to Apply for Online Payday Loans?
If you’ve gone back to consider all of the factors and are sure about your decision, it’s time to apply for a payday loan. Follow these steps to apply for one and get the funds as soon as possible:
Submit an Application
Find an application form for payday loans on the WeLoans homepage or after clicking the ‘payday loans online’ tab. Fill in the required information and submit.
Review Offers
After pre-evaluation and forwarding your application to lenders, you’ll receive offers from them. Find out more details about each offer and select one to proceed. The selected lender might ask you for a few more details.
Get Funded
Post-approval, you’ll only have to wait 1-2 days for the money to be sent to your bank account. Lenders may even deposit it as immediately as within 24 hours.
Final Verdict
Payday loans have multitude advantages, the most prominent being that you can borrow up to $5,000 for a short period. Not to mention, the money is deposited within 1-2 days, which is beneficial when you need the funds ASAP.
However, there are some things that you need to look into before getting a payday loan, such as the APR, lender, repayment terms, state laws, etc. Knowing these factors can be helpful in making informed decisions for your financial wellbeing.
