Payday Loans What are They and How do You Get OnePhoto from unsplash

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Are you in need of some quick cash? Do you have a bit of debt to pay or a sudden emergency that requires immediate money?

The average loan in the US amounts to over $52,000 per person. Everyone, at any point, is paying something. Most of this debt goes to paying bills like credit card bills, electricity, internet fees, and mortgage.

However, you might not get your paycheck on time to deal with some of these bills.

That’s where payday loans come into play. These are the ideal financial solution for minor emergencies.

Don’t worry if you’re not familiar with payday loans and how they work. Continue reading our in-depth guide below to learn all about payday loans and why you should consider applying for one.

Defining Payday Loans

What are payday loans? People also refer to them as cash advances or cash advance loans. These are small amount, short-term loans that you need to pay back by your next paycheck (hence the name).

Most payday loans lend from $100 to a few thousand. These aren’t the types of loans you’d apply for when you need to pay off bankruptcy or months’ worth of mortgage. These are loans you should get when there’s an emergency bill coming up and you know you can pay it back in a few days.

Another thing that sets payday loans apart from traditional short-term loans is the fact your credit score doesn’t factor into the approval process. We’ll explain this in detail below.

Reasons to Get a Payday Loan

Why get a payday loan in the first place? Why get a loan that you need to pay within a few more days? There are many reasons to get one, and it begins with the advantage of quick approvals.

Quick Approval

Finding a loan, particularly short-term loans from a bank, is nearly impossible. Banks take days to review an application and there’s no guarantee you’ll get approval. Your credit score could make or break your chances, even if you’re only applying for a small amount.

Payday loans only take 24 hours for approval. They don’t require a good credit score and the loan deposits into your bank as soon as you get approved.

Even the quickest short-term personal loan will take time for approval. At best, you’re still looking at three business days. What if you need the money today or tomorrow?

Easier to Pay

Quick approval isn’t the only reason to consider getting a loan. Payday loans are also easier to pay because of the smaller amount limited to you. This prevents you from getting into an endless cycle of debt.

Remember that the interest rate for a payday loan isn’t that high. We charge a 10% interest fee plus the $1 verification rate. This keeps the math simple to understand and the amount relatively easy to pay.

Traditional loans are much more difficult to pay and even more difficult to comprehend. A lot of people get confused between the difference of nominal interest and an APR, for example.

Fortunately, payday loans don’t have confusing terms to workaround.

Medical Emergencies

It’s always a smart decision to rely on a payday loan in case of an emergency. If you or someone you love gets into a medical emergency, you may need a payday loan to handle the medical bills.

This is especially the case when you need to pay the hospital or clinic before they’ll discharge the patient.

Bill Payments

Say, for example, it’s a Monday and you got your electric bill but you can’t settle it since your payday is Friday. You can get a payday loan first to pay the bill and then pay the loan back once you get your paycheck.

Do you have to pay a few hundred dollars on your credit card before your pay comes in? A payday loan is the best solution. This is a good tactic so you can pay on time and keep building a better credit score.

Use the Money as You Need

Getting an auto loan? You have to use the money for a car. If you’re getting an emergency loan to pay off your mortgage, the lender will check to make sure you used it for that stated purpose.

There is no such restriction with payday loans. The lender won’t monitor where you spend the money.

You can use the money as you please. You can split the cash to pay different bills and emergencies as needed. That said, you should practice caution and only use the money to pay off something important.

Requirements in Getting a Loan

It’s no secret that securing a loan is a lengthy and often difficult process. You need to have an account with the bank you’re applying from and you need a good credit score.

The bank will do a background check and may even ask for collateral, depending on how much you borrow.

That’s not the case with a payday loan. The requirements to apply are as follows:

  • must be of legal age (18 and above)
  • has a source of income
  • has an active checking account
  • proof of ID
  • US citizen

If you meet all five requirements, you can guarantee you’ll get approved for a payday loan within 24 hours. It’s that fast and simple. There are a few things to keep in mind, such as who qualifies and who doesn’t, which we’ll tackle next.

At Rapid Cash, we do require you to be a resident in Florida and to provide a phone number. This ensures you can get the notification immediately.

Who Qualifies For a Payday Loan?

As mentioned, you have to be a US citizen and at least 18 years old to qualify for a payday loan.

However, many lenders (including us) don’t approve payday loans for military personnel. This is to comply with the limitations imposed by the Military Lending Act.

You also need to have no ongoing transaction from the payday lender. With Rapid Cash, we require you to complete any open transaction and then wait 24 hours before applying for another.

Not only does this ensure financial security on our end, but it also guarantees you don’t risk falling deeper into debt.

Common Questions in Securing a Loan

Don’t fret if you’re not familiar with payday loans. There are a lot of factors to consider, after all. We’ll tackle some of the most common questions and concerns below.

Do I Need Good Credit?

This is the biggest factor that sets payday loans apart from traditional loans, even short-term personal loans. While both are good choices when you need a small amount of cash you intend to pay back soon, bank loans require a good credit score.

Payday loans don’t require this. This is because the loan is only for a short period, therefore credit scores don’t play a big role. It’s more important to verify that the applicant can pay with cash by the next paycheck.

Instead, they require you to have a steady source of income, one that direct deposits into an active checking account. This is important because it guarantees that you can pay the loan back as soon as possible.

Your source of income doesn’t have to be from a regular job. It could come from a government check, retirement, or business. However, it has to be an income that you get regularly, like once every two weeks or once a month.

Is There a Collateral Required?

Can’t raise your credit score? Some places will instead give you the option to offer collateral.

Collateral is like a secured secondary payment option. If you can’t pay back a loan, the bank or lender will take the collateral instead. This can come in the form of a car title, gadgets like a phone or laptop, or a house title. For big loans, collaterals are a requirement.

That’s not an issue with payday loans. You don’t have to give something as collateral. We do offer other types of loans that require some form of collateral but our payday loans don’t.

As mentioned, the only thing required for a payday loan is proof of income.

How to Apply For a Loan?

Simply visit any of our physical locations to apply in person. Prepare the requirements as listed above. You can inquire, apply, and get a response in person.

Are you too far or do you prefer to do things in the convenience of your home? You can also apply for a payday loan online.

How Long Does Approval Take?

Here’s the main problem with a traditional loan: they can take weeks for approval. By the time you get the money, it’s already too late. What will you do if you need the money now because of a medical emergency or a utility bill?

Fortunately, payday loans don’t take that long. You’ll get a response, whether approved or not, within 24 hours.

When and Where Will I Get the Money?

With Rapid Cash, if you apply before 3 PM EST on the weekdays, you can expect a response and the funds within the day. If you apply beyond 3 PM EST on a Friday or weekend, expect the funds to transfer to your bank by Monday or the next business day.

Simply check your bank and you’ll see the amount automatically deposited into it.

As mentioned, you can also apply (and get) a payday loan by visiting any of our physical locations. This is a great option for people who prefer to keep their information private and don’t want to risk sending information online.

What Are the Fees?

At Rapid Cash, there is a 10% fee added to the amount you borrow. We also charge a $1 verification fee. This is the only amount charged to you when applying for a payday loan from us.

There are no application fees, no deposit fees, and no charges above the initial 10% interest. There is no annual rate (APR) to worry about since a payday loan covers a short period. Keep in mind, there are also no fees for processing, whether you apply for the loan in person or online.

Of course, you can expect higher charges if you don’t pay the loan back on time. These high penalty fees are there to encourage applicants to pay the money on time.

Important Reminder

There’s no denying that payday loans are great solutions for short-term financial needs. However, you need to keep one thing in mind: don’t rely on payday loans to get out of debt. These are not answers for bankruptcy.

Don’t use a payday loan to pay off a bigger loan or to buy something. You might end up with another debt in your name.

Payday loans do have penalty fees in case you pay late. You could end up with a bigger financial problem than you started in. Use payday loans responsibly.

Apply For a Payday Loan Today

Payday loans are among the best solutions for short-term financial bills. Whether it’s for a medical emergency or utility bill, payday loans can get you out of a sticky situation. The approval process is quick and easy, even if you don’t have an outstanding credit score.

Do you want to apply for a payday loan? Do you have bills you need to pay right now but your paycheck doesn’t come in until a few days later? We’re here to help.

Get in touch with us right here, today! You can apply both in person or through our online forms. Apply for one now!