With incredibly high-interest rates and short-term repayment requirements, payday loans are unsecured cash advances for small amounts of money. Borrowers frequently require a typical loan of $500 to pay for necessities like rent, utilities, food, or medical expenses. Lenders will sometimes grant loans if they are confident that the borrower will soon have access to repayment cash, even though the name of the loan suggests that it is tied to the borrower’s paycheck, as given on the site https://www.lassoloans.com/texas-payday-loan/city/plano-tx.html.
In low-income areas of any country, payday loan companies typically operate out of storefronts. Most of their customers don’t have good credit and don’t have any other way to pay urgent bills. Despite the widespread perception that payday lenders charge high-interest rates due to the high risk to their customers, default rates are typically relatively low. Many states now regulate payday loan interest rates, and many lenders have left those states.
Applying for a payday loan: What do I do?
To be qualified for a payday loan, you usually need a valid photo ID and evidence of income, like a pay stub. You must be at least 18 years old. Some lenders also demand a Social Security number. You could still be denied a payday loan even if you have a bank account and a steady source of income. For instance, loans from lenders with annual percentage rates (APRs) higher than 36% are not permitted for active-duty military personnel, their spouses, and their dependents.
The repercussions of nonpayment
Depending on the lender and your state, you can be charged a late or non-sufficient fund fee. You might be able to postpone the due date through a rollover option, but this usually has a cost. You might also be charged bank fees if you don’t get paid. Your loan may be forwarded to a collection agency if the lender cannot recover the money owed.