Payday Loans

How To Qualify For A 24 Hour Payday Loan? What Are The Basic Loan Terms?

As the term suggests, a 24 hour payday loan is a cash advance program that payday loan companies usually approve within a matter of just twenty-four hours. However, it is very important for you to keep in mind that these are small amount of loans that are issued till the next pay day. It means you must repay the loan in full as soon as you get your next monthly salary credited into your checking bank account. Failure to make timely repayment can put you into bigger financial trouble, as lenders charge hefty amount of penalty fees. Besides that, you also become liable to pay additional interest for every single day of delay.

If you are late by one month, you will have to pay additional interest for this extra one month. Now, considering the very fact that the interest rate on 24 hour payday loan programs can range anywhere from 200% to 700% per annum, these loans are already very costly. If you are late in making the repayment, say for one month, you should expect to pay back at least double or triple of the actual principal amount. So, one thing is quite clear that these types of short-term cash advances do not make the bets financial decision. But, if you are still considering borrowing it so that you can get some instant cash, following are the eligibility criteria to fulfill.

Citizenship And Age

To start with, in order to qualify for a 24 hour payday loan, you must be a US citizen and at least eighteen years old. No matter how impressive your employment history is and how big a salary you earn every month, if you do not fulfill this criterion, your application for this type of loan is very much likely to be rejected.

Bank Account

Having a bank account in your name is another very important criterion to fulfill. People without bank account usually cannot qualify for this loan. In fact, the type of the account also matters. Most payday loan companies will not approve your application unless you have a checking bank account where your pay check is deposited every month. Still, these days, there are many other lenders as well who are approving loan applications to those who only have a savings bank account, not a checking account. Therefore, people with savings bank account also have a fair chance to qualify for a 24 hour payday loan.

Employment History

Most lenders will require you to have at least two years of decent employment history, where the last six months must be with the same organization. It means if you have switched your job too often and your current employment is only one or two months old, you may have difficulty in qualifying for this short-term loan. However, you do not necessarily have to be a salaried individual. These days, many payday lenders are offering 24 hour payday loan to self-employed professionals as well (as long as they meet the basic qualifying criteria). In fact, sometimes, even those who are not employed at all can qualify for it provided they have a regular source of monthly income, such as a court-ordered Alimony payment.

Post-Dated Check

Most lenders will require you to give a post-dated check, where the amount mentioned in the check should be equal to the sum of the principal amount plus the amount of interest for the period the loan has been issued to plus other finance charges (as applicable). The date of the check should be the due date, which in most cases is the next pay day. For example, if you are borrowing a 24 hour payday loan on March 20 and you get your monthly salary (or income) deposited into your bank account on 5th of every month, April 5th will be the due date for you and so the security check must also be provided for the same date. Here, it is very important for you to keep in mind that many lenders also provide you an alternative for the repayment. Instead of a post-dated check, they may ask you to authorize them to withdraw the agreed amount of money directly from your bank account on the set due date. Many others may even ask you to provide the password and other details of your bank account so that they can withdraw the cash directly. Though it sounds ridiculous but it is happening. Such unscrupulous lenders are running their business in the market and many consumers are getting caught in their trap. Consumers often fall prey to such traps because of the desperation to get that extra sum of money they urgently need. And, it is obvious that decision based on temptation or desperation can never be the right one; it can in fact turn out to be very costly. Therefore, you have to be very careful while you are reviewing the terms of the loan.

Credit Score

The good news is that a 24 hour payday loan does not require you to have a high credit score in order to qualify for it. Even if you have poor or bad credit, lenders will approve your loan application. Though these loans are unsecured ones, lenders often treat the post-dated check or the direct-withdrawal-authorization provide by you as a security. That is the reason they never check your credit score when it comes to approving payday loan applications.

No Paperwork, No Faxing, No Verification

You may also come across many 24 hour payday loan programs that boast some unbelievable features, such as no verification, no faxing and even no paperwork at all. For example, there are lenders who are approving loans within minutes over phone. They give you a call or you give them a call, and then, they ask you to provide some details about you and they claim that they trust you and that they are not going to ‘waste’ time in verifying the details provided by you. Imagine you are in a situation where you desperately need instant cash and someone is offering you just that without asking you to do any paperwork or to go through any hassle of even filling out an application form, it is obvious that you will be tempted to accept the offer. In this temptation and desperation, many people often provide some very confidential details to lenders and eventually become victims of identity theft and fraud. You are strongly recommended to avoid all those lenders who offer such unbelievable features. All such loan programs are scams. No wonder why even the FTC (Federal Trade Commission) warns consumers against the same.

Overall, as you can see, it is not very difficult to borrow a 24 hour payday loan, but it is also true at the same time that these loans are very costly and risky. Therefore, you are advised to consider better alternatives, such as borrowing from credit unions or conventional banks.

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