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Payday never seems to come soon enough. And believe it or not, almost 80 percent of the American workforce lives paycheck to paycheck.
This makes it incredibly tough to take care of those unexpected expenses that pop up between paychecks. So, what can you do if you need money fast and can’t wait another week for payday?
That’s where a payday loan can help. But there’s more to a successful application than just filling out the form.
Here’s what you need to know to increase the chances of getting your application approved fast.
Be Honest on Your Application
When you apply for a payday loan, the lender expects that your application is accurate and true. This means you can’t say you make more than you really do or lie about your credit score.
Lenders will find out when they go to process your application. When this happens, they’ll deny your request for the loan outright.
The best thing you can do is be honest. Fill out the forms as accurately as you can. And if you’re not sure about something, do a bit of research to find the answers you need.
Once you have everything filled out, review it. Double check your name, address, social security number, and bank account information for accuracy. If you notice any errors, fix them before you submit the application.
This will reduce your risk of getting denied the loan and helps speed up the application process for the lender.
Don’t Request the Full Amount of Your Paycheck
Payday loans are personal loans issued in amounts based on your paycheck. If you’re self-employed or have fluctuating paychecks, getting approved can be tough. The best thing you can do is request a smaller amount than what you typically earn each month.
You’ll still need to show evidence of regular payments. Your bank statements, invoices, and paychecks can help prove you’re employed in some capacity.
But it’s still unlikely that a lender will offer you a large sum. Spare yourself the frustration by only requesting what you absolutely need and not more. As an added bonus, this means you’ll pay less in interest over the course of the loan.
Build Your Credit Score Up
Many payday lenders do credit checks when processing your application. If you have a high credit score, you’re considered a low-risk borrower. This means there’s less chance that you’ll default on the loan.
But if you have a low credit score, you may find it harder to get a loan in the first place. If possible, try to build your score back up by paying down existing debts and avoiding acquiring new debts. This may mean you need to find another way to make extra cash on the side.
If you can’t, look for a lender that won’t check your credit score. There are companies that base their decisions solely on your paystubs. But they often charge higher interest rates and offer lower loan amounts.
Compare Lenders and Loan Terms
There are dozens of payday and personal loan lenders out there. But they don’t all offer the same types of products or the same terms.
In fact, most lenders offer completely different terms, interest rates, and repayment options. But you won’t’ know what your options are unless you research them.
Take your time to compare the terms offered by different lenders. And never settle for the first lender you find without doing your research.
If you don’t do your research and choose the first lender you come across, you could end up paying much higher fees than you should. Compare your options and choose the provider that best fits your budget and your needs at that time.
Have All Required Documents On Hand
Nothing stalls a loan application like missing documents and paperwork. Without information like your bank account number, social security number, and proof of employment, your payday loan provider can’t process the application.
But they may request additional documents to further speed up the process.
Review the requirements and the needed paperwork before submitting your application. If you’re missing anything, make sure you have it ready by the time you apply for the loan.
Make Sure You Can Afford the Payments
You’re expected to repay every loan you take out and a payday loan is no exception. But before you decide to borrow against your next paycheck, make sure you can afford the payments.
Your lender should explain the interest rate they charge as well as any fees associated with the loan after they process your application. This will include your expected payments and repayment schedule.
Think about the money you expect to have in the next few months. Will that be enough to repay the loan in full without straining your budget? If so, the loan is a good option.
But if not, you could end up in a vicious cycle of relying on payday loans and increase your overall debt which will only hurt your credit score.
A Payday Loan Isn’t Your Only Option
When you need money in a pinch, payday loans can seem like your only choice. They’re fast and easy to get. And their requirements are often easy to satisfy.
But sometimes, a regular personal loan is a better choice. You’ll be able to customize the amount you borrow a bit more and may get better repayment terms and a lower interest rate.
This article will help you learn more about personal loans so you can better understand your options before you start applying with lenders.
A payday loan can help you get through those lean times. But that doesn’t mean you should rely on them solely to help you make ends meet.
Start thinking of ways you can build your income, whether that’s finding a side gig or taking on more hours with your current employer. Use payday loans as an occasional way to fill in the gaps, not as a paycheck replacement.
And check out our latest posts for more tips to help you improve your finances and become the successful person you know you can be.