Pay day loans are basically designed for people who are in urgent need of capital to meet sudden emergencies. They are short term loans which come with a very high interest rate. The person who is the borrower is given a short tenure of time limit to pay back the loan amount along with interest rates that is pre-decided by both the parties.
Are you eligible to take up a payday loan?
The best part associated with payday loans is that they can be availed by filling an online application without lengthy document paperwork needed. However, to be eligible for a payday loan you need to have the following:
- A valid bank account.
- A steady source of income in the form of a private or a public job.
- Guarantee equity like your House, vehicle, jewellery etc. submitted as collateral.
The process involved
The process for a payday loan involves paying a short term loan to the borrower which is supposed to get clear by a fixed payday. The borrower writes a cheque to be paid to the lender for a fixed future date. This includes the amount borrowed plus the interest charges incurred. In case the borrower is not able to pay back the loan, the cheque gets bounced thereby making him fall in a serious debt trap.
In case you are suffering from a bad credit or low funds, and require money for a major financial setback, you can consider taking up a pay day loan. Through simple online application process and less of documentation required, a pay day loan comes as a great help in the face of financial emergencies. Always be aware of the terms and conditions involved, before buying any loan to prevent oneself from getting in trouble in future.