Payday loans are short-term loans with high interest rates for amounts that have to be repaid within two weeks or in any agreed-upon terms. These loans are also known as cash advance loans and are generally taken by people who are struggling with their month-to-month utility bills, rent, and other expenses that are not getting covered in their wages. Financial experts consider payday loans to be predatory, they tend to trap people in debt as the people who indulge in such loans are those who are in desperate need of money and who lack necessary financial knowledge. The interest rates on these loans are high even though they might look innocent on paper, generally, they charge 25% on every $100 which means if you take a loan of $500, then you might have to pay around $125 extra upon repayment. If you want to know more about payday loans then check out

The following is a list of things that you should take care of before applying for payday loans

A valid id proof

Even though acquiring a payday loan is not a difficult task as these loans can be taken with the most basic of paperwork. A valid id proof or security number is necessary to get cleared for a payday loan.

An active bank account

The borrower should have an active bank account. The bank account will act as evidence that you are an individual who has some sort of income coming through to them, also, the bank account is used as a security for the borrower.

Income proof

The third thing that you need is income proof. It doesn’t matter if you have a bad credit score or are incapable of repayment. All the money lender cares about is that you have some sort of income running so that they can have the first share of your wages whenever the repayment date is due.

An advance cheque

The lender will require you to sign an advance cheque with the due date of repayment. This advance cheque will be used as a security as when the time comes either the borrower can repay the money in cash or the lender can cash in the cheque.

Therefore, an id proof, an active bank account, income proof, and an advance cheque are some of the things that you should take care of before applying for payday loans.

Source link

Comments are closed.