How Old Do I Have To Be To Apply For A Payday Loan?
To apply for a payday loan in the United States, you must be at least 18 years old, but there are also some other requirements you will need to fulfill before you can be approved for the loan.
When you start as an adult, you should proceed with the utmost prudence regarding your financial decisions. This is because you want to guarantee that you are safeguarding both your credit score and yourself simultaneously.
What Is A Payday Loan?
Payday loans are an option worth considering if you find yourself in a bind and need financial assistance but cannot meet the requirements for a personal loan. Payday loans are small, short-term loans usually repaid when the borrower receives their next paycheck, anywhere from two to four weeks after the loan was taken out. Payday loans often feature high-interest rates, loan limits of up to $500, and do not require a credit check from the borrower.
While they may be readily available to many individuals, using them might be expensive and hazardous to you in the long run. How do payday loans work? What impact on your credit score? Here are alternatives.
The Process of Getting a Payday Loan
If your state allows it, you may get a payday loan online or at a physical facility, whichever is most convenient. There is no need for a credit check when obtaining a payday loan from most providers. Borrowers who need cash quickly and don’t have a strong credit history or any credit history may find it appealing.
After completing the application, you must submit a postdated check for the loan amount, including all fees and interest, to ensure that the lender is paid on or before your next paycheck. If you cannot return the loan by the due date, some lenders may allow you to renew or roll over your plan to extend the due date. However, doing so will result in extra fees and interest being charged to your account.
To qualify, what are the basic requirements?
The requirements may vary from one lender to the next. Even though you may initially satisfy the fundamental requirements, some lenders may be more stringent regarding your minimum monthly income. This is particularly the case for those receiving government assistance who are self-employed or have not held a job for more than a few weeks or months.
You must be aware of the fact that if you do not satisfy these fundamental requirements, it is quite probable that your application for a loan will be rejected in the beginning stages. The following are the basic requirements:
- You need to have valid citizenship status in the United States.
- At least 18 years of age.
- To qualify, you must have a steady income of at least $800 per month and a full-time or part-time job.
- For your loan to be deposited into your account, you must have a working checking or current account.
- You can’t have declared bankruptcy in the last several years.
Even if you have poor credit, it is still possible to receive a payday loan from Oak Park Financial. They work with customers who have a diverse range of credit histories. As the broker, it is our responsibility to select the most appropriate lender for you, one who is most likely to approve your application for a payday loan.
Why should I consider my age while making a decision?
If you are just now approaching the age range that makes you eligible for a loan, you need to consider whether you want to apply for one. At such a young age, you are responsible for managing the remainder of your life but also the financial aspects of it.
Payday loans have the potential to scar your credit history, leave you with more considerable debt, and make you dependent on other loans; nevertheless, they may also get you out of sticky circumstances. You need to take advantage of this moment in your life to establish a standard for managing your funds responsibly and sustainably. That isn’t to suggest that you shouldn’t get a loan, but before you do, you should be sure that this is the best course of action.
What Are Some Appropriate Ways to Utilize a Payday Loan?
Payday loans are intended to be a temporary financial solution for those with steady incomes who face an unexpected cash shortage. You should consider using one to pay for medical or veterinary expenses, have your automobile fixed, or fix your boiler. Whatever challenging situation you find yourself in, a payday loan may help you get the funds you need to carry you through to your next paycheck.
It is not like payday loans used for shopping or other forms of unnecessary expenditure, and they should never be used to make payments on other debts. Check out some more uses for cash advance loans here.
How much money can I borrow?
It is up to you and your lender to choose how much money you should borrow; nevertheless, you should approach this choice with extreme caution. You may acquire a loan from Oak Park Financial for between $100 and $35,000. However, since payday loans are often used for past financial crises, you may only need to borrow $500 or an amount close to this threshold.
If the sum is large, you might consider applying for a different kind of loan. When deciding how much money to borrow, you should first make sure that you can afford the monthly payments on the loan and then look at your income. When you overextend yourself financially, making your repayments on time might be challenging.
It is in your best interest to give some thought to the length of time that the loan will be necessary for you to get through your current financial challenges. You can choose a term just two to four weeks long, which will contact you for your next paycheck.
After that, you might make a single, concluding payment to reimburse the money. You are free to make an early repayment of the amount at any time, which will result in cost savings related to interest.
Why Did My Application for a Payday Loan Get Turned Down?
Your request for a payday loan may not have been approved for several reasons.
Your application will be summarily dismissed without further consideration if, to begin with, you have not satisfied even one of the fundamental requirements. On the other hand, several other potential explanations for why your application was not approved.
Inadequately Meeting the Requirements for the Bare Minimum Credit Score
When you apply for most loans, the lender will run a credit check on you to determine your credit history and how well you have met your previous financial responsibilities. This is done to determine whether or not they should grant you the loan.
Most loan underwriting processes are automated, and each comes with a predefined set of guidelines. First and foremost, you must ensure that you satisfy the primary requirements (see the previous section for more information). Then the lender will do a credit check, all of which will take place pretty much immediately.
If your credit score exceeds the lender’s minimum requirement, you can move on to the next stage of the process; however, your loan application may be denied if your score is lower than this. The minimum credit score requirement for a lender might be set to a certain amount, such as 600 or 700.
Do not allow the fact that you have a low credit score to dissuade you from applying. Applying will not impact your score, and here at Oak Park Financial, we welcome applicants with a wide range of credit histories.
Your Monthly Income Is Not Sufficient.
When deciding whether or not you are qualified for a loan, your income is a significant factor to consider since your income will be the primary method by which you repay the loan. The lender must have confidence that you have a stable source of income and that it is sufficient to proceed with the loan.
You might find that some lenders require your earnings to be a minimum of $800 or $1,000 per month, while others will allow you to be employed part-time and only earn $500 per month. However, this could vary from lender to lender, so you must research each potential lender before applying for a loan.
If you ask for more money than you can reasonably afford to borrow, the lender can conclude that you are living beyond your means and turn down your request completely.
The Debt-to-Loan Ratio Along with Affordability
When you request a loan, the lender will consider your capacity to pay back the loan and your ratio of outstanding debt to available credit. This feels how much money you have available to borrow compared to how much you have available to pay back.
Therefore, if you have asked for a loan, your monthly income may be sufficient to pay the amount; nevertheless, when it comes to whether or not you can afford the loan, you may have too many other responsibilities or other loans open. Therefore, regardless of whether you have borrowed $500 or $1,000, the lender may consider how well you can repay your loan if you are required to make monthly payments on credit cards, rent, and two other loans.
Your application for a loan could be turned down if the lending institution determines that you cannot afford the terms of the loan.
Frequently Asked Questions
How Can I Apply Online?
To get a payday loan, you must fill out a loan request form with either an online payday lender or a storefront facility that offers payday loans. Payday lenders operating out of physical locations may be located using a local business directory like Google Maps, while those working only online can be found via Google searches.
Each payday lender can follow its protocols and processes to seek and approve a loan.
What do I need to do to qualify?
Even though the conditions may differ from lender to lender, receiving a payday loan shouldn’t be too difficult.
The following are the primary criteria that must be met to be eligible for a payday loan:
- Have reached the age of 18 or be older than that.
- Be a U.S. citizen or permanent U.S. resident,
- Have a telephone number and an email address that are active,
- Have a checking account that is still operational,
- Have a monthly revenue from all your endeavors of at least one thousand dollars.
How much time does it take to get a loan?
Applying for an online payday loan will only a few minutes. After submitting your request, you’ll get a response in seconds. If your application is successful, you’ll be contacted by your lender to go through the details of the loan. The funding is finalized by the end of the next working day.
What if I don’t have a checking account?
To qualify for a payday loan from Oak Park Financial, you must first have a checking account that is currently open and funded.
What Consequences Will I Face If I Am Unable to Repay My Payday Loan?
You may face several severe penalties if you cannot make the payments on your payday loan. Your direct lender may attempt to automatically remove the monies from your checking account, initiate a payment negotiation with you, or simply transfer you to a collection agency if they cannot get their money back. To pursue repayment of the debt, the collection agency could initiate a lawsuit in civil court.
If you contact your lenders before you default on your loan, many of them will be willing to work with you to find a solution. It is always preferable to make an effort to find a solution rather than just defaulting on a debt.
Is It Possible to Have Two Payday Loans at the Same Time?
Payday loan regulations might vary widely from one state to the next. You may be able to get many payday loans from the same lender if you live in one of the states that allow this. On the other hand, you are only permitted to have one open payday loan at any moment in most states.
What happens if a payday loan isn’t repaid on time?
Your payday lender will likely turn your account over to a collection agency if you cannot repay your loan on time. The agency may initiate legal action against you and make unauthorized withdrawals from your bank account.
In most cases, you will be subjected to a significant number of phone calls from the collection agency before any judicial action is taken, if any action is done at all.
Is it possible to go to prison for failing to repay a payday loan?
It is impossible to go to prison for failing to repay a payday loan. On the other hand, if a lender sues you and you fail to appear in court, it might lead to significant penalties, including the risk that you would be sentenced to prison.
Even if I have bad credit, is it possible to get a payday loan?
Direct payday lenders do not conduct traditional credit checks on potential borrowers when determining whether or not to grant you a payday loan. This is because they believe your current income is the most accurate predictor of your capacity to repay the loan.
What Does the Typical Amount of a Payday Loan Look Like?
The typical cost of a payday loan may be anywhere from $100 to $1,000, depending on the lending company and the regulations of the state in which the borrower resides. The majority of states have a cap of $500 on the maximum amount of a payday loan.
What exactly is the APR? What Does This Imply Regarding the Consumer as a Whole?
The annual percentage rate (APR) is the interest rate paid on loan annually and indicates the actual yearly cost of funds throughout the loan’s duration. Although they have very high APRs, payday loans are not considered annual loans. These loans are subject to fees and are not designed to be extended for any longer than one month at a time. Because they were never meant to be used for more extended periods, online payday loans need to be repaid either when you get your next salary or on the due date.
What Kind of Impact Will Getting a Payday Loan Have on My Credit Score?
If you get a loan via Oak Park FinancialCash Advance, you won’t have to be concerned about how the loan will influence your credit ratings. The direct lenders we work with do not conduct rigorous credit checks that might impact your ratings. Instead, they will evaluate your potential to repay the loan based on the information obtained from other alternative credit sources.
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