Moms always have finances on their minds. While there are always the expenses you can count on like the mortgage, groceries, school uniforms, and the fees for soccer camp.
It is the unexpected that cay catches you off guard if you aren’t prepared. This is where an instant payday loan can help float you through an emergency. Emergencies like a plumbing leak or a broken arm on the playground, are covered.
This guide for mothers will help you learn more about instant payday loans, what they can be for, and how to use them smartly.
What is a Payday Loan?
A payday loan is a short term loan that is available through payday loan storefronts or online lenders. Payday loans are short term loans that are designed for people who need funds in a hurry for an unexpected expense or emergency.
With a quick application process and short lending terms, people can usually have access to their money within a couple of business days. These loans are usually paid back by the next pay period. This is why they are known as payday loans.
You can learn more here about how instant payday loans work and if they are the right choice for your emergency fund.
Payday loans are taken out for small amounts, for under $1,000. These fast loans will be for a portion of the borrower’s paycheck and they will need to be paid back by the next pay period.
How an Instant Payday Loan Works
The payday loan process is fairly quick. Depending on the lender or the amount, a credit check may be required during the application process. You’ll also need to verify your income with pay stubs or earnings statements.
Since these instant loans have such short terms, the lending requirements are fairly loose compared to a traditional loan or a mortgage but there will be a lower loan max.
Once you’re approved for the loan, the funds can usually get deposited into your bank account by the next day. You may also receive the funds in cash, certified check, or on a prepaid debit card.
You will not only need to pay back the loan but you will also be responsible for the interest and fees as well. These may be higher than a traditional loan because of the quick access to funds and the lack of collateral required.
Before you receive your money, you’ll need to agree to the terms, fees, and interest so there are no surprises when it’s time to pay back the loan. In some cases, you can repay the loan by authorizing an automatic payment through your bank account on your loan’s due date.
Why Would You Need a Payday Loan?
A payday loan can be helpful for moms and parents who need emergency funds to float them over until the next pay period. In some cases, there may also be loans available that are three-month payday loans.
Let’s say your car breaks down and you have school pick-ups, activities, and work to get to. If your emergency fund isn’t where it should be, you can borrow money to repair your car until your next payday.
People can use payday loans for things such as emergency home repairs, car repairs or medical bills.
While it’s always better to have an emergency fund for situations like this, if you’re unable to use one in a crisis, an instant payday loan can help you in a pinch.
Costs and Fees Associated with Payday Loans
Payday loans are going to be more expensive than a traditional loan. Because these are short term loans, you’ll see higher fees and annual percentage yield (APR) than with other loans.
Regulations on interest will vary by state so make sure to read all of your paperwork and loan terms. The federal Truth in Lending Act requires lenders to disclose finance charges so you’ll be able to see everything in writing.
Lender definition of terms will be disclosed and you’ll both be able to come to an agreement that works for you financially.
Typically, the terms of a payday loan will only be for 30 days or less and the loan amounts can be anywhere from $100 to $1,500. When used correctly and paid back on time, a payday loan won’t cost you any more than the interest and fees you’re charged initially.
The Instant Payday Loan Application Process
With a payday loan, you typically apply at a payday loan storefront or through an online lender. Depending on the lender, your credit may get pulled as part of the application process.
The better your credit is, the more favorable your terms will be. You can check your credit for free each year courtesy of the Federal Trade Commission to see where you stand. Each year you’re entitled to a free download of your credit report.
Not all lenders will do a credit check, however, so this may not apply to every loan.
To apply for instant payday loans, you will also need to provide your basic information as well as verification of your income. Once you’re approved, you may receive the funds almost instantly.
How You’ll Receive Your Funds
To receive your instant payday loan funds, you may be required to give a personal check for the amount due dated for the due date. In some cases, you may set up installment payments where a set amount is taken from your bank account automatically.
Funds will be dispursed in cash, deposited into your bank account, by certified check, or on a prepaid debit card.
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