How do instant payday loans work?

If you’ve ever taken out a standard loan before, then you may already know that this can be a long and drawn out process. You may have to wait weeks to find out if a lender is willing to let you borrow and it may take years to pay back what you owe. Instant payday loans, however, are designed to be very different.

This isn’t a criticism of regular loans. They are just designed to work differently. Payday loans are based on an alternative cash advance system and may well work on completely opposite principles to other loans. For example, they may:

1) give you a loan for a small amount of money;
2) allow you to get the money you need virtually instantly;
3) not put you through the hoops of a drawn out credit checking and approval process;
4) be paid off in a few weeks (or even days) with a set amount of interest added when you next get paid.

Let’s be honest now. You may have heard that payday loans come with high interest rates. This may not be that surprising given the advantages they may give you. They may sometimes cost more but you generally may not suffer if you manage your loan correctly. Paying back what you borrow when it becomes due just sees you pay a fixed sum on top of your loan amount.

Not paying back as you are meant to, however, may be when this kind of solution costs more. But, if you use high risk loan in the right way this may never be an issue. For many, the benefits of this kind of short-term cash advance far outweigh any disadvantages.

You may not have to go through a long credit approval process for this kind of loan but you may need to tick some boxes before you are able to apply. The criteria set by a payday loans company may vary but, typically, you may need to:

-work full-time;
-earn over a minimum amount every month;
-hold a US based bank account that comes with a debit card.

Instant payday loans may well be a quick and easy lending solution for those that may only need a small loan for a short period. These loans may be an alternative worth considering if you ever find yourself in this situation.

What are the benefits of a payday cash loan?

Payday cash loans are often used to meet specific lending situations. You may yourself find them useful at some point in certain circumstances. The fact is that your borrowing needs aren’t always necessarily the same. Sometimes, for example, you may need to:

– borrow a large sum of money for a number of years to do something specific;
– borrow a smaller sum of money to tide you over for a few weeks until you next get paid.

In the first instance a secured or unsecured loan may be an option. These products are designed to help consumers deal with relatively large borrowing needs. They may, therefore, be set up not to be paid back in full for years at a time.

But, some of us also find that we sometimes have shorter term and smaller borrowing requirements. Sometimes something comes up or we need some cash fast to pay for something that is important to us. But, we may not have a spare couple of hundred pounds to use until we next get paid.

This is where a payday cash loan may be useful. This kind of loan may be typically set up:

– within a few hours;
– to give you access to a small loan (i.e. $100 or $200+);
– to give you a loan until you next get paid at which point you pay back what you borrowed, plus a pre-agreed amount of interest;
– to leave you free from your debt again after your next payday (as long as you pay back what you borrow).

The benefits of this kind of lending may be that they allow you to organise a small cash advance with no fuss for a short time. The other alternatives in the lending sector may make you wait weeks for approval (with no guarantee that you’ll get it) and may expect you to borrow more than you may actually need to.

A payday cash loan may not, however, be designed to last for as long or to involve so much hassle. If you pay it back when your next payday comes along then your only cost is the agreed interest charged. Within a few weeks you may be debt free once again.

What are payday loans?

If you’re looking for a short term loans solution, perhaps even just for a minor amount of money, then you may find it worth your while to look at payday loans. Like any other lending product a payday loan involves borrowing money from a company and paying it back with interest.

But, these loans work a little differently to other lending products. These loans are designed to be:

– arranged and approved at short notice;
– used when you only need to borrow smaller sums;
– used to borrow for shorter periods of time.

These loans are typically used for stop-gap, short-term financing. A standard loan, such as a secured home loan or an unsecured loan, may take weeks to arrange and may come with a higher loan limit than you may need. These types of loans tend to be designed to allow people to borrow more money over years.
Payday loans, however, work more on a cash advance principle. You may, for example, need to borrow a couple of hundred pounds to tide you over until you next get paid. Money may be short, you may have an unexpected bill to pay or you may need fast access to cash immediately.

These loans get their name because they give you a cash advance until you next get paid. Used correctly, they are meant to give you virtually immediate access to a small loan for a few days or weeks. Generally, when you take out a payday loan, your pay-back time is set for your next payday.

So, if you take out this kind of finance you may typically find that:

– you are able to borrow a small amount with just a quick credit check;
– your loan may be processed and paid to you extremely quickly (i.e. often within 2 hours);
– you pay the loan back when you next get paid so you don’t have a long-term debt hanging over your head.

It may be important to think about how these loans are meant to work before you apply for one. This may be a great way of getting a quick and easy cash injection when you need it. But, if you don’t pay it back when you are supposed to, then the interest charges may be an issue.

Because of the way that payday loans work, their charges may be a lot higher than standard lending charges. However, if they are used correctly then this may not be an issue to you. Paying back what you borrow on time and not rolling your debt over or continuing to borrow may make this a viable lending solution for you.

Learn more here – “Payday Loans and Cash Advances”

Ok, I have one more question

I figured up all my recurring bills, electric, cable, etc….I would need to take out $216 per week to pay it all….problem is everything is behind. Would you just start taking out $216 per week, and pay what you can and put the balance in one bill’s envelope until you get enough to pay it on time, and work your way through all the envelopes or would you put the money in each one’s envelope and try to come up with the extra money to pay it on time? I’m not sure where to start there….with being behind.

debt snowball

Follow them in order and all your questions should be answered. He keeps it pretty simple.

1. $1000 baby emergency fund (have that yet?)
2. Debt snowball until all you have left is the mortgage (if you minus out the car payments, are you to this point yet?)
3. Save 3-6 months worth of expenses for a fully funded emergency fund (s/b easy to do once the debt is paid off, including the cars)
4. Save 15% of your income for retirement.
5. Save for kids’ college.
6. Pay off the home mortgage.
7. Build wealth like crazy.

Including the cars in the debt snowball is a huge key to your success. He’s worked these steps with thousands of families and it works! You need to get your husband to a Live Event or let him read the Total Money Makeover. It’ll help inspire him to get rid of the car notes.

Good luck!

Oh, this makes me mad!

I’ve been going through the same thing with some really awful debt collectors and it’s been a nightmare.

Whatever you do, don’t send them any money right now. They are trying to intimidate you into paying them before you take care of your “four walls.” They will say anything to make you mad and upset you. They want you to get to the point where you will pay them to get them off your back. I don’t think sending them a pro-rata letter is a good idea either. If they see you have money to pay anyone else, they will continue to try to intimidate you until they get to the top of your list.

If you do want to work out a settlement with them, you should send them a validation letter first. It can be a simple one-line letter saying, “I dispute this debt in it’s entirety and request validation.” Make sure you send it certified mail return receipt requested. Once they receive the letter from you (you will get the green postcard with a signature as proof), they cannot contact you until they have sent you proof that you owe them the money. You should never pay any debt collector anything without proof that they are collecting for a credit card you owe or that they have legitimately purchased a debt that you owe. They also have to account for the amount they say you owe them, original debt, interest, etc. If they can’t prove those things, you don’t owe them a dime.

Now about the phone calls – what they are telling you on the phone sounds like a violation of the Fair Debt Collection Practices Act.
They cannot threaten to take any property, garnish your wages, or anything like that unless they are lawyers, and they are not lawyers, they are a collection agency. A real lawyer wouldn’t threaten you like that on the phone. And they definitely can’t take your car! By violating the FDCPA, the collection agency is liable to pay you $1000 per violation plus legal fees. That would probably cover a big part of the debt you owe. You may choose to fight them and try to collect that.

If you have a way to record the phone calls and the threats they’re making, then do it. If it isn’t legal in your state to record phone calls, then take detailed notes of the calls including the date and time. Check this website to see if it’s legal in your state to record phone calls: http://www.rcfp.org/taping/ It’s only illegal to record if you’re in a 2-party state. If you’re not in a 2-party state it’s OK to record because you are one of the parties consenting to record the call.

Once you have written or recorded documentation of the harrassing phone calls, find a lawyer who will take your case without you first paying a retainer fee – my experience has been that most lawyers will try to talk you into bankruptcy, but don’t go there. Maybe you know a lawyer or have a friend of a friend who can recommend a lawyer for you. If you’re in Oklahoma, I can recommend someone.

I know it’s scary to get a lawyer involved, but if you don’t settle with them (only after they have validated the debt) or if you choose to ignore the debt collector, they will either sell your debt to another debt collector who will start the collection process all over again or they can retain a lawyer who will initiate legal proceedings to sue you (some states require they get a lawyer in your state, I know Oklahoma is that way). If you get sued they can put a lien on your property or garnish your wages and it will cost you a lot more money than if you had just settled with them. Please don’t let it get to that point (I learned the hard way and have been sued and am in the process of being sued again).

Whatever you do, don’t make decisions out of fear. That’s what they want you to do. Also, don’t believe anything they’re telling you (like they don’t have to validate the debt). Part of their tactic is to lie to you and they will say anything to get your money.

Thank you all for your thoughts

We were leaning towards doing it, but wanted to make sure I’m not being totally stupid. My husband isn’t able to do any additional weekend work because of a disability, and I am already to the max with my job and some part-time consulting I pick up on weekends. We’re hoping my husband continues to move up the ladder where he is now to help us dig out. Even if we made an extra one or two hundred on the side, with the interest rates we have on our current mortgage, it will take so much longer to dig out from this horrible loan. Hoping to stay accountable here to not spend the freed up money on paying stupid taxes in other areas (like out major downfall of the past…going out to eat!!!)

So the bottom line is that you are only $100 short each month?

Is there not a way to earn that much extra? Is there a way either one or both of y’all could take a 2nd job? It would be temporary of course, till you get on your feet again. I am just thinking out loud … you say you don’t want to do the loan mod. and if a 2nd job could keep that from happening why not put a hold on the mod for now? Retail stores are now (or will be) hiring seasonal help.

If earing extra $$ is not going to happen, what about getting a deferment on the student loans or hardship case?