Everyone has been through the experience of being strapped for cash during emergency situations, at least once in his or her lifetime. Sometimes, in such situations, one does not need a huge amount of money but falls short of the requisite cash. These small amounts of cash usually will not be loaned out by banks and even if they are loaned out, the process a person has to go through to get the money is time-consuming and full of red tape. In such situations, quick loan schemes, such as payday loans, prove to be very helpful, fast and effective in getting cash on hand fast. They do not involve the long processes of filling out endless forms and some do not even require a credit check before the loan is sanctioned. The process is fast and highly recommended for borrowing money on a short-term basis.
What Is a Payday Loan?
The idea of a payday loan is for the lender to lend a relatively small amount of money in the range of $100- $1000 to a borrower for a short period of time, with the expected time of return for the money being based on the borrower’s next payday. The process is quick and does not involve the usual bureaucracy that is often followed by big banks before sanctioning a loan. Since payday loans are very short term loans, the interest rate is quite high, with some payday loans having an interest rate fixed at 1.6% per day. The high-interest rate is kept mostly to make sure that the borrower returns the money as soon as possible without delaying the return.
Applying for Payday Loans
Usually, companies forwarding payday loans do not ask for many documents from borrowers. However, it is common practice to check the borrower’s employment, salary, and a basic credit check. With the advent of the internet, payday loan applications can be easily filled out online and the necessary documentation can be scanned and uploaded onto the lender’s website or they can be e-mailed or faxed to the lender.
The documents that are generally required are bank details, identity proof and a direct debit authority permission letter as well as contact information. After a preliminary verification of the documents, the loan is usually forwarded to your salary account and the principal and interests debited by the loan office when you receive your next salary on the stipulated due date.
Legitimate payday loan offices follow responsible lending policies in accordance with the law of your state. They also advise you on the amount of the loan that is to be withdrawn based on your salary and regularity of receiving payments. They also send you a reminder of your loan due date before debiting the return amount from your bank. The entire process is quite free of any hassles or complications and is quick and easy.
Payday loans in NZ have become highly popular due to their promptness of service and easy availability. However, every loan office believes that you should be careful about where you apply for your loan. It is a good idea to go through their terms and conditions carefully and critically, so that you understand exactly what will be expected of you in terms of repayment. Also, taking advice from someone good at financing before taking a loan, is always beneficial. Payday loans are for emergency purposes and should not be used for long-term financial fixes.