If you need to borrow a little money, consider getting a payday loan. These loans are short term loans and are usually for a small amount of money. A lender will loan the money to a borrower on the terms that the borrower will pay the lender back by his or her next payday. This can vary based on when a person is paid, but the time frame is typically about 30 days. How it works is a borrower first gives a postdated check to lender with the amount they want to borrow, plus any additional fees. The day the check matures, the borrower is expected to pay the lender back in full, in person, or the lender can simply cash the check. If there are not enough funds in the borrower’s checking account, there will be a bounced check fee, and the check can end up on a Chex Systems file.
There have been cases where the borrower has been unable to pay the loan back in the given time frame. Some lenders have tried to prosecute these borrowers, but the Community Financial Services Association condemns any action taken against a borrower. It is also illegal in many jurisdictions to institute legal proceedings against borrowers. Another protection afforded borrowers is that some jurisdictions limit the APR lenders can charge. But there are some restrictions that certain states enforce. In Illinois, a payday lender can only loan either a maximum of $1,000 or 25 percent of a borrower’s income, whichever is less.
Payday loans can be much easier to acquire than a bank loan because many of these lenders only require a minimal background check. Depending on the lender, you might only have to verify employment or income. Payday loan lenders do not typically run credit checks, but each lender is different. There are also online payday loans that you can look into. These sites might have a short application to fill out, and should be able to get you a loan quickly after they have verified your information. This can be faster way to get short term loans, without the hassle and paperwork involved in dealing with a bank.