Payday loans have grown in popularity because of their easy application and approval process. Unlike other lending institutions, payday loan lenders don’t check the borrower’s credit history or credit score. They also don’t check out the borrower’s bank statement and current credit status. Although payday lending companies have lower requirements for loan approval, they don’t totally lack on requirements for their loan applicants.
The lender will check an applicant’s employment status or proof of a stable income, citizenship, age and if the applicant’s checking account is active. However, with the increasing popularity of payday loans, many payday lending companies are springing up and some of them claim not to perform any checks on their applicants.
A payday company that doesn’t perform any requirement checks for loan applications is definitely suspect. Some payday lending companies also require a start-up fee from the loan applicants before they get a payday loan, this is a clear indication that the company is a fraud and should be avoided at all costs. Most genuine payday companies will also ensure the safety of their applicant’s private information, an applicant should be assured of this before beginning the application process.
It is important for applicants to provide the necessary details and ensure that they have all the requirements before applying. Their checking account should also be in good standing with no overdrafts or negative balances. They should also be in a position to supply proof of employment and a valid Social Security Number when required. Anyone below 18years shouldn’t bother applying because most companies require only over 18 year old applicants.
Giving untruthful information will definitely result to denial of the loan application. Applicants might be tempted to lie because they fall short of some of the lender’s requirements and are desperate for the cash. It is always advisable to only state the truth because most lenders might have or come up with lending packages best suited for such situations.
Before application for a payday loan, applicants must fully understand the terms and conditions surrounding these loans. The repayment rates, interest rates and the rate of any penalty fees or other charges should be clear to them before application. If there are any discounts incase of earlier repayment of the amount before the scheduled date, then the payday loan applicant should full take advantage of that if they are in a position to do so.
It is also important for applicants to know their limit and avoid taking a huge loan amount that will further lead to more financial strain. They should also have a clear plan on how they are going to use this money to avoid wasting it. Often times people apply for them because of financial emergencies, but sometimes they also apply for them simply because they need extra money which might not necessarily involve an emergency.
Applicants should also avoid making multiple loan applications at the same time because loan requests can be easily tracked and most lending companies are likely to deny such an applicant the loan. Applicants are advised to apply for a single loan at a time and until the loan is approved and paid, they stand a little chance of getting another loan approved.
Applicants with successful payday loan applications should provide feedback for the payday loan company. The feedback will be important in helping other new applicants get a payday loan after making informed choices. The feedback will also help the payday loan provider improve on their loan service where necessary. The coming of payday loans indeed changed the lending industry in a significant way.