As you may have noticed, payday loans have been getting a lot of attention recently. Because of this, you probably have some questions about what they are and how they work?

In this article, you will find some of the most common questions about payday loans, with all the answers you need to make a well informed decision about whether or not payday loans are the right solution for your situation.

What are payday loans?

Payday loans are a short-term solution for people who need money fast. The borrower lends a small amount until their next paycheck, so they can pay the bills or get urgent repairs paid for.

payday loan

How does it work?

The quickest way to apply for a payday loan is by going online. By visiting online lenders such as you can choose the amount you want to borrow and then fill out their easy to understand application form.

Once you get approved, expect the money to be transferred to your account that very same day, so you are not left hanging around waiting for the funds.

Do I qualify for a payday loan?

As long as you are over the age of 18, have some form of regular income, and have a bank account where the money can sent to, then you should qualify for a payday loan. Obviously, each lender looks at applications on a case by case basis, so there is no guarantee that you will be approved.

One of the interesting things about these type of loans is that you can get approved even if you have bad credit. Payday lenders are not worried about your credit score, and they do not look at your credit report when assessing your application.

How much can I borrow?

The amount of money you can borrow depends on your own personal situation. Lenders will look at your current income level and decide upon the amount in which they feel comfortable loaning out.

Typically though, the average payday loan is around a few hundred dollars, although it is not unheard of for people to borrow over $1000.

What happens if I don’t pay back the money?

If you default on your payday loan then a number of things will happen. Firstly, the payday lender will make a note of the non-payment on your credit report, which leads to your credit score being reduced.

Secondly, when the lender cannot recover the money by themselves, they often enlist the services of a debt collection agency who attempts to collect on the lenders behalf.