This Guide will assist you with making your decision whether you should require Payday Loans. Emergencies and uncertain financial situations are the hard realities that we all come across once in our lives. Some take help from family; some borrow from friends.
But when they are also running on a tight budget and have no more money to help you survive in this ruthless world, you go for a bank loan option but unfortunately it requires you to fulfill extra formalities that consume pretty much time.
In such circumstances, when you are in a hurry, and you are out of cash, then you can use financial assistance from payday loans service providers.
Unfamiliar with payday loans? No problem, keep reading; you will get a solid understanding of what it is and how it can benefit you.
What is Payday Loans?
Payday loans are that type of loans in which a person borrows money with an intention to pay the borrowed money on his next salary day.
However, lenders are always strict when it comes to your affordability check to ensure that you will pay them on your next salary.
Payday loans are massively disliked by individuals around the world and the reason behind this is that, it comes up with higher interest rate then Banking Institutions.
Thus, it is harmful for individuals with bad credit as they don’t have quick money paying facility; they have to face the bone wrecking interest cycle. Still, it is one of the easiest ways to obtain loans out there.
How Payday Loans Works
So, you have decided and want to get a payday loan but unsure about its procedure? No worries, we have discussed the whole process over here in detail. Payday loans can be availed with 2 ways, either you can get the assistance physically or you can run an online application.
Most of the time, lender won’t ask you to show them credit-check but in some cases they will, so keep this I mind. Other details may include your income and salary pay date.
When the lender approves the payday loan, you actually approve a Debi-check Mandate in order for the Lender to be able to Debit the amount due from your account electronically.
Credit scores do matter when it comes to payday loans. Because lenders are registered with the National Credit Regulator and have to comply with policies regarding over indebtment so that no reckless lending occurs.
Payday loans are the loans that you can take easily without having to fulfill hard formalities as compared to the rest of personal loans that you take from the bank. However, you have to be very careful; in cases that you aren’t, then you may end up in an endless cycle of debt.
Choosing Payday Loans Service Providers | 5 Factors to Keep in Mind!
When you are about to take payday loans online, there are some factors that you should keep in your mind while finalizing the service provider to save yourself from any scam or fraudulent activity. Following, we have discussed the factors for your convenience:
1. Check Whether They Are Legal Or Not?
First thing first, you should ask the company what their NCR number is. Might be thinking it’s rude to ask? No, simply it’s not! It’s your right to ensure that the payday loan you are about to take from the company is licensed by the National Credit Regulator and cover essential rules and regulations as provided in the National Credit Act.
The other benefit you will get after asking for the NCR number is that you can ensure that you are dealing with a Legitimate Credit Provider and not a Loan Broker or Third Party. It is always best to deal directly with a Registered Credit Provider.
2. Customer Service/Site
Here is another factor that is important to consider while finalizing the payday loan company. For this, look up on their site whether they are providing the real and important information that is essential to know? Additionally, check if they are educating you about their terms and conditions as well as APR and exactly how much you would be repaying including all costs.
Keep this in mind that the information placed over customer service /site will help you make an informed decision. Therefore, you can borrow the RIGHT amount of money and protect yourself from any bad practices at the same time.
3. Get the Interest Rate Information for Payday Loans
This is the most crucial factor that most of us take it too obvious in the beginning and after taking the services; only regrets are left to hug you. When you are taking payday loan services from a company, ask about what interest rate they charge?
The National Credit Regulator only permits 5% interest on First loans and 3% thereafter in a calendar year. All other Fees should be disclosed openly on the website and Credit Agreement.
4. Hawk-Eye Over Terms & Conditions
Again, it’s better to make sure that you are well aware about the lender’s terms and conditions. It would be best if you had a better understanding of how they proceed. For this, you can simply ask about it.
Financial Experts advise that if you are taking a payday loan, then it’s better to discuss the payment policies. Though payday loan service providers don’t always follow extremely strict payment deadlines, some lenders have strict payment timing and require you to pay them by the end of the month on your salary date, while some have flexible payment policies in case of late payment.
However, always mention when you will pay the full loan amount. So, it’s better to put a hawk-eye on terms and conditions. And, never trust the lender who doesn’t tell you about the interest rate!
(Something fishy, right!)
5. Real or Fake?
OK, this one should be on the top of your checklist. Ask your lender about the APRs according to your regional rates and law. To check their authenticity, you can check their APRs by a simple Google search. Remember that, fraud lenders hide the APRs and doesn’t inform you about it.
Also, don’t get distracted over the amount of money. Make a well-aware loan lending decision by keeping it in your mind whether you can pay back the loan with your next salary or not!
Why You Need Payday Loans?
There can be multiple reasons you may need a payday loan. It is a quick way to get financial assistance when you are going through a rough patch in your life. It can be availed without such strict or specific formalities.
The beautiful part of payday loans is that you can get this loan even if your credit score is quite unappealing. Following are the circumstances in which you need help from payday loan:
- Emergency Bills: Not all the time are you ready to beat uncertain and unexpected situations. In such cases, you need big bucks to pay bills. Whether it be an unexpected health care bill or a car expense, you can pay both or similar bills with a payday loan.
- Student Life Expenses: We all know that student life is full of expenses and often times we are out of cash because expenses are just increasing day to day. If you need financial help with your student loans, library or food expenses, payday loans can rescue your costs.
- Not Getting Other Loans? So, you have applied for a personal loan but your credit card doesn’t meet the requirements for personal loan? You have knocked on the bank’s door, but it didn’t get opened for you? If that’s the case, then a payday loan is the option you can go for.
Payday Loans Pros & Cons
It’s a no brainer that you don’t always have pretty much extra money in your piggy and real bank to deal with real-life financial issues. In such circumstances, the first option is to go towards your family and loved ones for financial assistance.
But when they are also dealing with a situation which is no-more different than yours is then that’s the point where you look up for money-lending options. Bank doesn’t provide loans easily and want you to go through a long pain staking application process with tons of formalities to fulfill.
However, payday loans come to your rescue at this time and provide you the quick-money assistance that you have to pay back on your next paycheck. If you are planning to get a payday loan then you should know the pros and cons of payday loans for better decision finalizing.
Pros
1. Quick-Cash Fix
The first and foremost benefit of payday loan is that it won’t make you wait for the money for long. Banks and other loans actually provide loans with slow process but when it comes to payday loans; it fulfills your urgent money-needs on the spot. The lenders offer you money in your bank under 24 hours that makes it a perfect option to fulfill quick needs.
2. Easy to Fulfill Requirements
Traditional loans are hard to avail as they want you to provide them multiple documents and formalities. Thus, you have to go through multiple phases for the loan. However, payday loans are easy to avail as it comes up with easy to fulfill requirements, terms, and conditions (Documents) such as:
- Least age: 18 Years
- Identity card
- Appropriate Income Source
- Bank Account
3. Seize Your Money Online
Whether you are a couch potato who doesn’t like to leave his cozy couch or you want a payday loan online, here is good news for you. You can find money-lending service providers online. Thinking how? It’s simple, you have to Google about it to provide plenty of service providers along with useful information whether it is allowed by your government or not.
Money Collection
With the Introduction of the New Debi-check Debit Order system, no Credit Provider can Debit your Bank account without your permission and or consent. They may only debit the exact amount and only on the day that is specified by yourself.
Cons
- Hidden Charges & High-Interest Rate
When you are borrowing money from a payday lender then don’t forget to think about the hidden charges and interests’ rates. Even traditional loans come up with additional costs with a certain interest rate, but they are still clear about it. When it comes to payday loan lenders, they are not that much clear, you have to investigate on your own. All Legitimate Credit Providers though will have Fees and Interest rates available to you upfront and in clear display.
- Quick-Money Payback Options
Another drawback of payday loans is that they force quick borrowed money submission. You don’t get the Capital for a long time. Few lenders may provide you loans for 3+ months but most of the lenders offer financial assistance for 40 days after which you have to repay the loan.
Payday Alternative Options
So, you have just come across that payday loans are not what you can pay on time then don’t worry at all! There are still numerous ways that you can take financial assistance to fix your money problems. Following, we have discussed all those alternatives that you can choose for yourself:
- Date Extension
The first option is the easiest one and for this, you easily ask your landlord and all of your creditors to give you pretty much time until your money come in your bank. With a simple request, payment date can be extended and you can go through in such situation easily.
- Advance Salary
This one is another easiest option a smart person goes for. In this, you actually talk with your boss or with your job’s financial department to cooperate with you and provide you your salary in advance that you can use it to ease your expenses.
- Sell & Make Quick Bucks
It’s a no brainer that not all the times you have to get some loan to fulfill your urgent expenses. Some time, you can sell your valuable things to others to make some quick bucks for your critical use.
- Help from Loved Ones
It’s a problem that you don’t have to go for loans if you have somebody in your family or your surrounding that can assist you in your hard time. Take help from them and return the money as soon as you get your salary.
Personal loan
Yup, a bad credit score is not always a bummer. You can still lend a personal loan online if your credit score is bad! Thinking it’s not real? There are multiple online lenders that provide you loans with minimum credit scores. Just do proper research and find Legitimate providers.
- Installment loan
An installment loan is also a great way to make your financials stable. When you get these installment loans, you have to pay certain amount of money a.k.a installments on a monthly basis.
- Credit Card
If you haven’t consumed your credit card maximally, then it’s time to take full advantage out of it. You can use the required Amount which doesn’t cost you higher interest rate that you can pay on after 30 days.
- Debt Review
If you simply have accumulated too much Debt and you cannot afford to repay all of your installments you can apply to a Debt Counselor for Debt Review. This will assist you in Re-arranging your Debt into a more affordable payment plan.
How to Payback Payday Loans?
OK, so your payday loan is now approved and that loan (Additional charges & Interest included) is due dated in your next salary day. But confused about how you will pay it back? It’s simple; it will be deducted from your account (on your salary day).
But in case you are unable to pay back the loan then you must know that automatically you have to pay the loan on your upcoming salary day with more Interest and charges.
Conclusion
Though payday loans are a perfect go-to option to grab quick financial assistance in an emergency, uncertain or unexpected situations however, they come up with some drawbacks too that might affect you financially. So, that’s why always figure out that is a payday loan is suitable for you?
Would you be able to pay back the loan on your salary day or not? Can other options fulfill your needs or not? After analyzing the benefits and drawbacks appropriately, make an informed decision and put your best efforts to pay back the money on the agreed time to avoid any debt.
Apply for a loan at https://www.expressfinance.co.za
FAQ’s: Your Common Questions Answered Here!
Q1: What is credit score?
A: Your Credit score is usually a number between 0 and 999. It is Calculated by taking into account all the details on your Credit Bureau Profile. All South Africans are entitled to a yearly free copy of their credit report.
Q2: How to improve credit scores?
A: It decreases when you don’t spend the money wisely however, you can still improve it. For this, you can take credit repair company services, ask to increase the credit and last but least, closing your accounts are the factors that can help you gain back the good credit score.
Q3: What are the easy payday loan alternatives?
A: Though there are many alternatives that we have discussed above like personal loans, lending money from loved ones, advance salary and selling personal stuff to make quick-money are the options that you can go for.
E-mail us at dirkswart@expressfinance.co.za and we will cancel the application/decline it and documents will be deleted.