Emergencies can be financially devastating. It forces you to spend a relatively huge portion of your budget you didn’t account for. Otherwise, you might have to face serious consequences. For example, getting into a car accident can make a mess out of your budget. It leaves you with considerable medical bills that, if not dealt with, can lead to debts that can accumulate over time.
Unless you have a budget set for emergencies, you’d most likely struggle with your finances for a while. Fortunately, loans exist to help you in these kinds of situations. When looking for a loan, there are several options to choose from, one of which is payday loans.
What Payday Loans Are?
A payday loan is a type of loan that allows you to borrow money on the condition you pay it back on your next paycheck, hence the name. Unlike most options, payday loans have low maximum amounts, short deadlines, and higher interest rates.
Currently, most payday loans charge an interest of USD$15 to USD$30 for every USD$100 you borrow, which means it has an interest rate of around 15% to 30%. Moreover, some loaners require borrowers to pay it back within weeks, especially since paydays are usually monthly.
However, you’ll find a few lenders out there that are a bit out of the ordinary, like 67 Cash Today and similar companies that offer relatively low-interest rates and have lengthy deadlines. Because of these agencies, payday loans remain one of the most sought-after types of loans, especially by those in need of cash for emergencies.
Tips When Applying For Payday Loans
As a borrower, you’d want to ensure you’d get the loan you need. So if you’re planning on applying for a payday loan, here are four tips to help you out.
1. Be Completely Honest
Most lenders rely on one’s ability to make money when going over applications. For that reason, it can be tempting to lie about your income, but doing so would only compromise your application’s validity.
For starters, lenders typically require borrowers to provide proof of income. If you’re not telling the whole truth, you’d only be digging your own grave by lying. You should also double-check or even triple-check your application since mistakes can lead lenders to assume you’re providing false details, which in turn would lower your chances of getting approved.
2. Choose A Lender Situated In Your Country
As you may already know, borrowers can now apply for a loan via the internet. This means you can finally borrow from lenders from foreign countries—though this might not be a good idea.
For one, the rules and regulations surrounding cross-border financing are a bit complex. Hence, lending from these providers may lead to serious issues. Furthermore, it can make the process lengthier and overly sophisticated, which might not sit well with you. Besides, why should you look for a lender from a different area if you can borrow from local lenders?
After all, local providers see you as a referral source for prospective clients, so they’re more likely to approve your application. Of course, that’s only true if you have a valid reason.
3. Provide A Good Purpose
When applying for loans, you’ll find that most companies tend to ask for details about why you want to get a loan. This, too, can affect their decision on whether to approve you or not. Hence, your answer should be reasonable. Examples of common loan purposes include the following:
- Payment for medical bills
- Budget for wedding
- Funeral costs
- Car repairs or maintenance
- Sudden travels
Depending on the urgency, payday loan providers would have varying impressions on you as the borrower. If, for example, your primary purpose is to fund holidays or home improvements, they’re less likely to approve your application. So far, medical payments seem to be the best answer.
4. Don’t Go Overboard With The Amount
Depending on the state you’re in, the maximum amount for individual payday loans can range from USD$300 to USD$1,000. Although that’s the case, you shouldn’t go overboard with the amount.
Make sure it aligns with your purpose. For example, if you say it’s for your medical bills, USD$1,000 would be understandable. However, if your objective is to get your car fixed, asking for more than USD$1,000 might be a bit too much. This can lead lenders to conclude you’re lying about your purpose, thereby increasing your chances of getting rejected.
Much like most loan types, you’ll have to do many things if you want to get approved. You have to build up your credit, prepare the necessary documentation, and more. While the process can be daunting, it’s often the only choice you have if you want to get out of your current predicament. These tips should at least help you maximize your chances of getting approved for a payday loan.