If you’re in a bind and require some fast cash, a payday loan might be the solution for you. City Finance can help you determine if you’re eligible for a payday loan and quickly get you the money you need. Every loan is different, but you’ll typically need to meet the following criteria to be eligible for a payday loan:
Be at Least 18 Years Old
When you apply for a payday loan, you’ll need to be 18 years old. It is the legal age of adulthood in Australia and the age at which you’re legally allowed to enter into a contract. Most payday lenders will require you to provide a copy of your driver’s license or other government-issued ID to prove your age.
Regular Source of Income
To be eligible, you’ll need a regular income source. It could be from full-time or part-time employment, self-employment, government benefits, or another source. In addition, you’ll need proof of your income when applying for a loan.
Active Bank Account
You’ll also need an active bank account to get a payday loan. It is because the loan will be deposited into your account, and you’ll make repayments by authorizing automatic withdrawals from your account. Besides, most payday lenders will require you to provide a voided check or bank statement when you apply for a loan.
Be an Australian Citizen or Permanent Resident
If you’re not a citizen of Australia, you may still be eligible for a payday loan if you’re a permanent resident. You’ll have to provide proof of residency when applying for the loan. For the most part, you’ll need to meet the same criteria as Australian citizens to qualify for a payday loan.
How Payday Loans Work
A payday loan is a type of short-term borrowing in which a lender extends high-interest credit based on the borrower’s income. The principal of a payday loan is typically a portion of the borrower’s next paycheck. For immediate short-term credit, these loans charge high-interest rates.
The borrower writes a postdated personal check for the amount borrowed, the fee, and the date when the loan is due. The lender holds the check and cashes it on the agreed-upon date, usually the borrower’s next payday. Sometimes, borrowers sign over electronic access to their bank accounts to receive and repay payday loans. Payday loan companies rely on customers who renew or rollover their loans because they cannot afford to pay the full amount. If a borrower defaults on their payments, the lender may cash the postdated check or withdraw money from the borrower’s account.
Benefits of Payday Loans
Payday loans offer many advantages. That said you may want to consider both the pros and cons of payday loans as these loans tend to have very high interest rates and can worsen your financial situation.
Quick and Easy Access To Cash
Payday loans are a quick and easy way to get cash when needed. When you need it for an emergency, you can get the money as soon as the next business day! In cases like these, payday loans can be a lifesaver.
No Credit Check Required
Payday loans don’t require a credit check, so you can still get a loan even if you have bad credit! It shows that payday loans are accessible to everyone.
Payday Loans are Confidential
When you take out a payday loan, your information is kept confidential. Therefore, only you and the lender will know about the loan. However, unlike other loans, your friends, family, or employer may find out.
Flexible Repayment Terms
Payday loans have flexible repayment terms. For example, you can choose to repay your loan on your next payday or extend the loan for a longer period. Either way, you’re in control of when and how you want to repay your loan!
Should You Get a Payday Loan?
Now that you know all about payday loans, it’s up to you to decide if one is right for you. If you need cash fast and don’t have any other options, then a payday loan may be the way to go. However, ensure you understand all the terms and conditions before signing any contracts!
Moreover, shop around and compare different lenders to get the best deal. Payday loans can be expensive, so finding a lender with the lowest interest rates and fees is important.
Lastly, remember that payday loans are meant for short-term use only. If you need long-term financial assistance, you should consider other options, such as personal loans or credit counseling.
Does this help you make your decision? If you’re unsure, it’s best to speak to a financial advisor to get professional advice. They’ll be able to help you weigh up all the pros and cons of taking out a payday loan. And they can also offer alternative solutions if they think a payday loan isn’t right for you.