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Most people have heard of payday loans, but they may not understand how they actually work. There has also been a lot of misinformation spread about these types of loans, largely due to past issues with disreputable lending companies.
Today’s easy approval advance payday loans offered by reputable lenders are a good option to provide funding when needed between paychecks. These are not intended to be loans that are used on an ongoing basis, but rather to address short-term cash flow problems that can impact anyone for a variety of reasons.
How Fees are Charged
There are specific laws and policies that govern how a payday lender operates. These are regulated by the state, but there are also federal laws as well. For example, the lender must provide all information on the fees and costs of easy approval advance payday loans, and they must provide the borrower with the annual percentage rate or APR.
Additionally, the lender has to stipulate the payment schedule, which is typically the next payday. Some lenders may allow the repayment over two paydays, but there will be an additional fee on the unpaid balance for the additional time the loan is outstanding.
The best companies will charge a flat fee based on the amount borrowed. This will be a set amount per $100. At the time the principal is taken out of your next check the lender will also take the pre-set fee. Ask about any additional charges and make sure there are no hidden costs.
Credit Scores and Collateral
With easy approval advance payday loans, the lender is not worried about a client’s credit score or having collateral to cover the loan. Instead, they use your job, your monthly income and your direct deposit into the account you provide as the way to withdraw their loan and fees as per the terms of your agreement. The amount of the loan is typically limited to no more than $500, but it may be less depending on your monthly income.
This makes the application process simple and easy. The lender will just need to verify your employment and that you have an active and established checking account with direct deposit for your paycheck.
With the new systems, the borrower will be notified by an email approximately two to three days before the loan repayment and fees will be withdrawn from the account. There will be nothing additional the borrower is required to do, which makes this type of borrowing very simple and easy for busy working people.