When it comes to finding the money you need to address an unexpected financial situation, payday loans are a great way to get access to several hundred dollars without a lot of hassle. A payday loan simply allows you to access the funds of your next paycheck today. It is one of the fastest, easiest and most misunderstood financial products on the market today. Here are a few things that you need to know about payday loans.
Fact vs. Fiction: The Realities of Unsecured Borrowing
Payday loans have taken on the mistaken identity of a predatory loan because many people, including financial experts, don’t truly understand how they work. A payday loan provides you with fast, unsecured access to funds from your future paycheck. They allow you to write a check, which is then held until you get paid again, up to 30 days in some cases, for a fee. This fee, while charged as a flat rate, is expressed as an interest rate or APR in your loan documents. This APR can seem insanely high when compared with other loan products. However, when you compare the loan term, payday loans are often less expensive than loans with longer terms since the interest is only charged once.
Consumers are Protected
Payday lenders, like all other financial institutions, are regulated by several federal and local governing bodies. This ensures that they are not engaging in deceptive practices. For example, every payday lender offers a full disclosure statement of the terms and conditions that govern the loans they make, including the fee structure. They are not allowed to charge fees that are not disclosed to you at the time the loan is taken out. This ensures that they are in compliance with the federal truth in lending act. In addition, 34 out of 50 states have additional, local regulations regarding payday lenders that dictate how much can be borrowed, how many can be taken out at once and more. These laws are designed to protect borrowers from getting in over their heads or payday lenders from charging excessive interest rates for their loans.
How to Get One
If you have determined that a payday loan is the best loan for your unique situation, you can begin the process by completing a payday loan application in person or online, depending on the type of lender you choose to do business with. You then supply the necessary documentation which generally includes a photo ID, proof of income, proof of residency and proof of an active bank account. Most payday lenders do not perform a credit check, which makes these loans the perfect solution for anyone facing a temporary financial situation, regardless of credit.
Wyoming payday loans and payday loans across the country are a useful financial tool that, when used responsibly, can provide great benefit to those who need to borrow a few hundred dollars until their next payday.