Payday Loan Costs and Requirements

Cost and calculating cost

Because of the ease with which one can apply for a payday loan, they tend to be rather expensive. A lender will lend the borrower anywhere from $100 to $1500 for a period of 1 week to 1 month. The borrower is then expected to pay back the loan plus a fee charged that can range anywhere from $20 to $100. The borrower will be required to either write a post-dated check or allow a withdrawal directly for their checking or savings account. A borrower can compare different loans and their cost by using the APR.

Qualifying for a Payday Loan

There is no Credit Check required to qualify for a payday loan. Because of this, they have a set of requirements you must fill before they are willing to give you a loan:

* Must be currently employed
* Must be making at least $1,000 a month
* Must be 18 or older
* Must be a Citizen of the U.S.
* Must have a checking or savings account with direct deposit (if applied for online)
* Must not be a member of the Armed Services

Requirements

While a payday loan may be easy to acquire, a borrower must still meet a variety of requirements. A lender will verify these requirements by asking for a large amount of information during the application process.

The information you need to provide will include:

* Personal information including a social security number
* Employer information to verify pay and employment status
* Bank account information for depositing the loan and later withdrawing from it for repayment.

Sometimes the borrower will be required to fax additional documentation such as bank statements and signed paperwork, other lenders will be able to use an e-signature and bypass the need to fax. Once that form is filled out, the borrower will be contacted by the lender to verify the loan and can expect to receive funds as quickly as the next morning.

How much can I borrow with a payday loan?

The amount you can borrow from a payday lender is different in every state but the standard amount is anywhere from $100 to $1500

How long before I have to pay back the loan?

Payday loans are generally paid back on the borrowers next payday, hence the name. Given that people get paid on different periods, there are different term lengths available. The most common type of payday loan is a 14 day term because most people get paid by-monthly but it is also possible to get a 7 day loan, a 21 day loan and a 28 day loan.

Source: ezinearticles.com