When Things Get Tight, a Payday Loan May Help

We?re living in tough times. The economy is heading toward a serious recession, if not a depression, people are losing jobs, and new jobs are hard to find. Meanwhile, rent keeps going up, gasoline prices fluctuate, and everything seems to cost more. More and more Americans find themselves without a cushion of cash in case of an emergency. When the unexpected happens, there often seems to be nowhere to turn. Nevertheless, a payday loan may provide a short-term, emergency solution.

Payday loans are unsecured loans against your next paycheck. They have short terms, generally two weeks, and can be extended in some cases. You can borrow up to $1500 at interest rates of ten to twenty-five percent. All you need is a job making at least $1000 a month.

You can apply for a payday loan online and generally receive the money within 24 hours unless you apply on a Friday or Saturday. Then you will have to wait until Monday. It only takes a few minutes to apply and your loan can be approved within a very short period of time.

You are eligible for a payday loan if you are over 18, have been employed at the same job for at least 6 months, are an American citizen, and make at least $1000 a month. You must also have an established checking account. You are also eligible if you receive income of at least $1000 a month from Social Security, disability, or alimony.

You might not be eligible if you are paid once a month instead of twice, if you have declared bankruptcy recently, or if your job or checking account is new. Active duty military personnel are not eligible but can seek help from financial services on base.

Some companies offer the first loan interest free. These loans tend to be small, about $100, but if you pay it back on time, future loans will be for larger amounts. Based on your income, you can borrow up to $1500 in some cases.

Individual states have different rules for payday loans so be sure to find out what your state laws are. This information is easily found online and will tell you things like allowable interest rates and terms, and what repayment options are allowed.

There are generally three ways to repay a payday loan. The first, and most common, is to repay the loan in full with applicable interest and fees on the due date. Usually, this is your next payday, and the loans are set up to pull money directly from your checking account.

If you can?t pay the loan in full, you may be able to pay just the interest and fees and roll the balance of the loan over to your next payday. This option is not legal in every state so be sure to ask your lender about this.

A third option is to pay part of the principle, plus interest and fees, and roll the remaining balance over into a new loan. You will be charged interest and fees on the new loan and may be able to get more than one extension on this.

To apply for a payday loan, complete a short online application. You will need to have your bank routing number and your account number as the money will be directly deposited into your account, usually within 24 hours. Once your application is submitted, someone will contact you to verify information and discuss repayment options. You may be asked to fax your most recent pay stub or statement of benefits to verify income. You will also be asked to provide references, and your references will be contacted.

If you default on a payday loan, you will not be able to get another one until you have cleared up the old debt. This information will also be reported to credit reporting agencies and will adversely affect your credit rating. If you can?t make the payment on time, it is important to contact your payday loan lender several days before the due date to discuss this. They are more than willing to work with you and will be glad to extend your loan if possible. Most lenders require at least 48 hours notice to restructure the loan.

Payday loans are intended to be a source of emergency cash. They are not intended to be used to pay everyday living expenses. If you are having trouble making your regular financial obligations, you may want to look into a debt consolidation program.

However, if something comes up unexpectedly, a payday loan can be a good short-term solution if you are sure you will be able to pay it back in a timely manner.