Category: General

Borrowing

What Are Payday Loans and How do They Work

During our life time, we encounter numerous events that may leave us needing some extra, emergency cash. Unfortunately, not all people have it at the moment of the emergency, which is the main reason why many choose to borrow money.

However, the process of borrowing money may turn out to be quite difficult in case you have a bad credit score, or don’t have much to give as collateral for banks, which is why numerous payday lending providers have appeared in regions from all around the world. In fact, in the United States alone, the payday loan industry brings in about $40 billion per year worth of profits, which is quite understandable, considering the fact that people are in constant need of extra cash. While the fees are a bit high from time to time payday loans have proven to be an efficient solution in getting people the cash they need, quickly and easy, without much hassle, especially in the event of an emergency.

In this article, we will explore more about payday loans, how they work, their advantages and why you should consider getting one for yourself.

The main purpose of payday loans

Payday loans have been designed for people who are in need of some extra money before they get their next pay check. This makes payday loans a quick and easy way to get some extra money, which can then be used to take care of any emergency that may appear. Before anything else, it is important to keep in mind the fact that payday loans only give out small amounts of money, typically ranging from around £50 up to £1,000. Anything more than that would require you get an actual loan, so the process will be somewhat more complicated.

The process

Understanding the process of getting a payday loan represents the first step towards success if you ever intend to use these services. Most companies have physical stores, where you can walk in, submit your documents and get your loan, whereas others conduct their operations online, or via telephone.

1. Contacting the provider

Once you have decided that you would like to get a payday loan, you’ll have to look for a provider that fits your description, and has taxes that are compatible with your actual budget. Emu.co.uk is a good example of this. Once this happens, simply get in touch with the provider, either by going to their store, online or by telephone.

2. Submitting your documents

Most applications consist of a couple of documents, including banking information, employment information and contact information. If needed, the lender may also ask for some data on your friends and family, which they can call in case you refuse to pay back your loan.

3. Writing a loan check

Once your documents are approved by the payday loan company, you will have to write a check to the lender, outlining the amount of money that you would like to borrow, while also pleading that you will pay the amount due, alongside with the afferent taxes before a certain date.

4. The lender will proceed to deposit the money in your bank account

Once all of the formalities have been dealt with, the lender will proceed to deposit the sum directly to your bank account, or even give it to you in cash, depending on the agency. Deposit times vary. While some agencies may deposit the funds instantly, others may take about a day before giving you the funds.

5. The lender holds your check and then cashes your account

During the period of your loan, the lender will hold and take care of your check. Most payday loans last for 2-3 weeks, or even more, depending on the agency. Once the time is up, the company will proceed to cash out the sum from your bank account. In case you don’t have the money needed in your bank account, you have the possibility to ask for an extension that is usually in the range of 14 days. Do keep in mind the fact that this will most likely incur an extra fee that you’ll have to pay once the term is up.

Conclusion

Based on everything that has been outlined so far, getting a payday loan is both easy and convenient, as long as you afford to pay back the sum and tax, before the term comes. Not only this, but some payday loan providers are also open 24/7, which means that there is almost always an agency that you can go to, at any time of the day, in case you have to deal with an emergency. Payday loans are also perfect for those with bad credit, as agencies rarely require a credit check, given the small amount of money being borrowed to clients.

General

Things You Should Know Before Borrowing Money

There comes a time in the lives of millions of people from all around the world, when they either need to borrow money, or are asked to lend money. Knowing the ins and outs of the practice is essential to making good decisions, and making sure that you are not affected from a financial standpoint.

With this in mind, it has been often said that money is quite personal, which is why people often face emotional trouble when it comes down to either borrowing, or lending money. In this article, we will talk about some of the main tips associated with both borrowing and lending, as an effort to make sure that you have decent knowledge in case you are ever put in the two situations mentioned above.

Borrowing money

When it comes down to borrowing money, doing it from friends or family members is not always a wise idea, considering the fact that it becomes a lot more emotional, and it can put some strain on both parties involved. With this in mind, it may be better to considering borrowing money from an alternative means, such as a bank, or lending company. While it is a bit more risky, it is safer in the long run, as there are clear conditions set-up and you won’t end up facing any surprises.

If you must borrow money from a friend, do it properly

It is often considered a good habit to ask friends for a loan in writing, and attempt to give out as much transparency as possible. By doing so, you will not damage the relationship between your and the lender, but also increase your chances of being able to borrow in the future, if you ever need to do so again. Also, avoid asking for astronomical sums, and attempt to disclose what you’re planning to do with the money, as this can create a better sense of trust.

Only borrow money from the people you trust

Choosing the person that you will borrow from can be quite difficult. Firstly, you can’t expect anyone to borrow you money out of sympathy, and secondly, it is important to only talk to people who you truly trust, in order to avoid getting the word out about your financial difficulties, but also to maintain a better relationship with the person that you are borrowing from.

Consider payday loans

If you’re in need of an urgent loan, don’t have an excellent credit score, or much to offer as collateral, then your best bet would be to choose a payday loan. These particular loans are designed in such a way, that they allow you to pay the loan back once you get your next pay check, so they represent a great way of getting some cash quickly, while also not having to worry about much in return.

Lending money

Avoid getting confrontational

Once you’ve made the decision of helping your friend or family member with some money, you shouldn’t get confrontational with them, or address the person in question as if they owe you something. By doing so, you will damage the relationship between you too, and also risk not getting your money back. Instead, if your friend is facing trouble paying the sum back, try to confront them in a friendly manner, and do inform that them you are in need of the cash back. Communication is indeed key, so if you don’t get your message across, you will not get your sum back. Based on this, don’t be afraid to confront your friend, but try to do it nicely at first. You also shouldn’t be afraid to drop hints, as the person in question, may already have the money, but they may have simply forgotten about paying it back to you. Dropping hints will also encourage your friends to be quicker in paying you back.

Attempt doing everything in writing

In case you’re worried about not getting your money back in full, or not quickly enough, you can attempt to do everything in writing. Simply sign a contract with your friend, disclosing the amount being borrowed, when it should be paid back, if there is any interest and what the repercussions are. While this likely won’t help you much in court, having some form of ‘official’ document will likely encourage your friend to give the money borrowed back as soon as possible.
Based on everything that has been outlined so far, by following these tips, you’ll be safer both when borrowing and lending money. Simply put, communicate efficiently, avoid getting confrontational and always think twice about borrowing or lending money from a friend, considering the fact that there are a good number of risks associated with the practice, and also numerous lending companies and banks willing to leave you out of the hassle.