- Treat a loan from a friend or family member just as seriously as you would a loan from a financial institution, and fully document it.
- You should also contact your local credit union. Banks rarely lend small amounts, or to people with bad credit, but credit unions are often more sympathetic, and provide loans at much lower rates than payday lenders.
- Don't take out a payday loan unless you have absolutely no other option and are sure that you can pay the loan back on time.
- For example, if you need a loan for $400, a company may charge you $100 in fees.
- Therefore, you would write the company a check for $500 that they would not cash until the payment for your loan is due.
- Problems can easily arise when a large portion of your paycheck is going straight to the payday lender, prompting you to take out another loan to cover you until the next payday.
- Recognise the problems that can arise. There are many problems that can arise if you find yourself turning to payday lenders to cover your bills. As the loans are short-term and relatively quick and easy to get hold of, people often end up taking out small loans regularly, in part to cover the costs of the previous loan. This cycle of debt can trap people into high cost loans and increasing indebtedness.
- You can get free debt and money advice to help you plan your finances and avoid this situation.
- If you find yourself rolling over your debt, the costs will increase very quickly.
Method 2Applying for a Payday Loan with Bad Credit
- Identify all eligibility issues. Before you proceed with a payday loan, make sure you are eligible and able to repay. Rules concerning eligibility may vary by lender, but are likely to involve income, age and other factors. Be sure you understand these before you apply for a payday loan. Information that a payday lender may require of you includes:
- Proof that you are over 18 and a United States citizen.
- Your contact information, including a telephone number.
- Your social security number (only some companies will require this).
- Proof that you are employed and that you receive a bi-weekly or monthly payment of more than a certain amount (the amount will vary depending on the company). You can use payment stubs to prove your employment.
- Proof that your bank account has been open for a certain period of time (some companies may only require you to have had the account for a month, while others may ask for 90 days).
- Give a valid email address, where people can contact you even if you’re far away and not available over the phone.
- Visit a payday loan office. When you go into the office, you will be asked to fill out the application form. Make sure to read the entire application before beginning to fill it out. Have the lender clarify anything that you are confused about, and ask her to point out the different fees that you may be charged.
- Assess all the fees involved closely. Keep an eye out for these in the fine print of the agreement, and avoid getting into a loan that is more expensive than it first appeared.
- The Truth in Lending Act requires that these sort of companies need to be transparent about the fees they will charge you, so ask the lender outright what fees may apply to your loan.
- Once you have confirmed that you agree with the information contained in the application, fill it out.
- Establish the value of your next paycheck. Payday loans are made with that amount in mind. Lenders will consider your basic recurring expenses and then probably limit the loan to a percentage of your monthly or weekly income. For example, if your paycheck is generally $1000 every two weeks, the lender may cap the amount you can borrow at $500.
- This may not sound like a lot, but bear in mind that if you borrow $500 you have to pay it back in two weeks alongside the loan fees.
- This might result in you being short of money for the following two weeks, which may prompt you to consider taking out another loan.
- Work with the lender to establish an appropriate amount for the loan, but always be wary of someone offering to lend you money you may not be able to pay back on time.
- Write out a check and leave it with the payday loan officer. Once you have determined the amount you are going to borrow, the lender will charge you a fee. This fee is the interest rate that will be based on the amount you are borrowing. The lender will have you write out a check.
- For example, you may be charged $25 for every $100 that you borrow. If this is the case, then you have a 652% APR (annual percentage rate).
- By presenting the cost of the loan as a one-off charge, the rate of interest on the loan can be somewhat obscured.
- While a payday lender may charge hundreds or even thousands or per cent of interest, bear in mind that a credit card typically charges around 12% APR, and a bank loan around 7% APR.
- Pay off your payday loan on time. You will most likely be given until your next payday to pay off your loan. When that day arrives, the lender will cash your check. If you have enough money in your account, then your transaction with the lender will be over. If you do not have enough money in your account, the lender will charge you a fee that will increase the longer you do not pay off your loan.
- If the cost of paying off the loan leaves you short for the following weeks, resist the temptation to rollover the loan, or get another payday loan.
- Think of alternatives and avoid getting trapped in escalating payday loan debt.
Cash Generator is a UK-based operator of discount retail stores. Headquartered in Bolton, Greater Manchester, the company opened its first Cash Generator store in the centre of Bolton in 1994 and by the beginning of 2011 had expanded to over 130 stores, many of which are operated by franchisees.
The company describes itself as 'The Buy, Sell ...
Payday Loan Store Outdoor Neon Sign 20" Tall x 37" Wide x 3.5" Deep
Office Product (The Sign Store)
Payday Loan Store Clear Backing Neon Sign 20" Tall x 37" Wide
Office Product (The Sign Store)