Understanding Requirements of Pay Day Loans Online

Pay day loans online offer benefits of getting a small amount of money quickly. They help to stretch your pay for the month and pay for emergencies. There are set requirements all borrowers must meet before being approved for a loan. These differ between companies but there are some that are common.

Over 18 Years of Age

Those borrowing money in the United States must be 18 years or older. This is the law set by the government not rules set by lenders. The lenders will check that you meet this requirement.

Hold a Checking Account

The money is transferred directly into your bank account and payment taken from there at the end of the month. The checking account needs to be one that accepts internet bank transfers. There are some companies that can handle cash payments but this can cause more hassle for the borrower and lender. The benefit of doing everything online is that you can receive the money instantly instead of waiting for a store to open.

Some lenders demand that you have a checking account to set up a direct debit with. This allows them to guarantee repayment of the loan on a set date. It makes it easier for you but can cause problems if you find your pay will not stretch far enough again.

Be in Employment

Lenders need to know that you will have the money at the end of the month to repay the loan. They are less interested in the financial history since the term is so short. This involves being in employment. The majority of lenders for pay day loans online ask for borrowers to be in full-time employment. This offers more protection due to the larger pay but there are other lenders who have part-time employment as a requirement. These lenders typically offer a lower amount to borrow in line with the amount a person earns each month.

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There is an issue for those who are self-employed unemployed and military servicemen and women. Those who are self-employed are less stable financially and run the risk of not earning enough the next month to pay the money back. Similarly those who are unemployed will struggle with benefit payments to meet the requirement. Military personnel have the issue of legality problems; not all lenders are allowed to loan to them.

It is important to check the employment requirement before applying. If you are in doubt contact the companies directly to find out whether you meet their requirements. This will help to avoid disappointment and waste time. There are companies willing to loan to the unemployed and self-employed; they just take a little longer to find.

Amount Available to Borrow

While some lenders offer up to $1500 this is not available to everyone. The lenders will consider the amount a person earns each month to determine if the disposable income is available. Those who only earn $1000 per month would struggle to pay back $600 let alone $1500.

It is also important to think sensibly when borrowing through pay day loan lenders. You need to meet the payment plus the fee for the loan. If you cannot the money roles onto the next month you damage your credit rating and a large amount of interest is applied. It is possible to arrange a further loan but this still affects your credit rating.

It is important to check the requirements before applying for a loan. The majority of lenders will say yes as long as you meet those requirements. This helps to protect them while offering you better terms for the pay day loans online.

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April 2014