What is a Payday loan?
The Payday loan, known also as a fast loan or cash advance , is the most accessible way to get a credit immediately without the need for a contract signed with a bank.
As the name calls it, it is a fast-paced loan for a short time. In general, such loans are very useful in unpredictable situations when you need urgently a sum of money. The reimbursement period is usually very short, sometimes only a few days. Most of the time, money is refunded after receiving the next salary. For this reason, the amounts granted are not very high. It’s like getting money from a friend until you get the next payment, often and the procedure is just as easy.
If a classic credit from a bank requires many papers and the analysis process is long, in the case of a Payday loan the formalities are minimal. Approval is done very Paydayly, in some cases even instant, and the money becomes available immediately.
Payday loans are not guaranteed and therefore involve far greater risks for non-bank financial institutions that grant them. That’s why interest is much higher than a normal credit. However, this is less important, due to the low amount of the borrowed amount and the short repayment period.
This type of credit is addressed to those who need money immediately to resolve an unexpected problem or get out of a critical situation.
Why choose a Payday loan?
- The necessary documents are very few. Most of the time, there is no need for an income certificate, but just for your identity card.
- No warranties. You do not risk losing your house or car if anything comes in and you can not return the money on time.
- Payday approval. In general, it takes a day or more, but there are companies that announce you within minutes or even if you are eligible or not.
- You get the money fast. As a rule, funds are transferred immediately after the credit is approved. There are sites where you can get credits online only with the bulletin, in record time.
- You do what you want with the money. Unlike the questions put to you by the bank, in this case you should not give any explanation.
- Short duration. Classic loans are offered for periods of at least a few months, but generally longer. Even if you only need money for a few days or weeks, you are required to pay for the entire contract period.
- Fixed interest. You pay only the amount set from the beginning without any hidden clauses or commissions. Though many people think that a Payday credit has exorbitant costs, things are not that way. Perceived interest is even lower than that paid to the bank for exceeding the limit on the credit card, for example.
- It does not matter the history. You will get the Payday loan even if you still have other loans in progress from banks. Some institutions also accept customers who appear in the Credit Bureau’s database as bad-payers.
Types of Payday loans
There are several Payday loan options, but they all share the simplified grant procedure and the short duration.
In the US, a frequent practice is to fill in a pre-banked check for when the salary is paid. On that day, the lender can collect the loan amount plus interest.
A similar variant is the payment and electronic refund of money. Thus, the amount enters the debtor’s account and automatically withdraws from it as soon as it receives the next transfer. It is also possible to choose the automatic extension of the loan for another month, in which case only the interest is withdrawn from the account.
Non-bank financial institutions in America often use the fax to receive the documents needed to approve a credit.
In Romania, this is rarer. In our case, Payday loans are usually obtained either after a meeting with a sales agent or a consultant of the company, or through a 100% online procedure.
Conditions for Getting a Payday Loan
Each non-bank financial institution has its own rules, so they differ from case to case. However, there are some general criteria applied most often.
The most important condition is that the applicant can prove a stable income. This may be a salary, a retirement or any other minimal source of money from which the loan can be recovered. Unlike banks that require salary certificates, fast-paced financial institutions do not need this. Revenues can also be proven through a bank account statement where stable receipts occur.
A variant of income verification is the consultation of the ANAF database, for which the person requesting the loan is required. Classic banks also use this solution more and more often.
Depending on the amount requested, there is a minimum monthly income threshold needed to approve a credit. It differs from one firm to another but generally requires at least 500 lei per month.
Other possible conditions: age between 18 and 75 years (some companies require a minimum age of 22 or 24 years old), stable residence in Romania, valid identity card or card, salary certificate or account statement.
How To Get Money With A Payday Loan?
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The first step is to compare existing offers on the market and choose the one that seems most convenient to you.
Attention, many companies have promotional offers for the first credit, in some cases it is offered even without interest. Read carefully the terms and conditions of the loan. Most of the time, they are displayed transparently on the site. Many businesses have an online computer on the front page, where you can find out exactly what interest, how much you have to pay back, what are the late penalties and other useful information.
Once you’ve chosen, make sure you have the necessary documents and set up a meeting with a company agent or apply online for a Payday loan.