What Does Obtaining a Payday Loan Entail?
Having to wait for payday to get your money may be impossible in instances when you have emergencies or unforeseen expenses. It is at such times that a person is required to use other means of getting money. For some people, selling household goods such as furniture and electronic goods is the way to go. Others on the other hand opt to get the money they need by obtaining loans. Our focus here is on those people who get the money by use of loans.
The payday loans are one of the most common types of loans. In some places, you will find it going by different names such as salary loans, payroll loan or even short-term loans but they all refer to one thing. The loan is given to employed people on a short-term basis. The person being given the loans is expected to pay back the amount he borrowed on his payday and hence the name pay day loans. For employed people who need cash and are thinking of getting a payday loan, here is some crucial information you should have.
That only persons expecting employment salary qualify for this loans is the first thing you need to know. Bank statements and pay stubs are some of the documents the lender may require as proof of your employment. The individual lenders or businesses can also use other different means to confirm your employment details other than using those documents. These methods used to confirm your details should not worry you as their main aim is to check if you qualify for a loan and if you do, how much you can get.
Though the payday loans are referred to as unsecured loans, the lender has to have some assurance that they will get their money back once you are paid. You will be required to write the lender a post-dated cheque if you do manual loan application by filling the loans application papers. Once you pay back the loan, you can get your check back. The lender has the right to cash the cheque and obtain his money if you fail to pay back the money. On the other hand, doing an online application involves you authorising automated remittance to the lender once money is deposited into your account.
The interest rates placed on the loans is something else you need to have information about. Due to cases of some firms charging exorbitantly high-interest rates on the loans, the government through the tax agencies put a rate on the interests to be charged. The right interest rates for payday loans in Australia today stands at twenty-four percent. A firm or an individual lender, therefore, charging anything above this interest rate is running his business against the lending and borrowing regulations.