Payday loans offer short-term financial help for fast cash needs. They are often used to handle unexpected expenses or emergency between paydays. The borrower receives the money in their bank account and pays it back with interest on their next payday or within a set time.
There are several reasons why payday loans work well for some individuals. First, the approval process is typically quick, allowing borrowers to get funds fast during emergency. Payday loans also need little documentation and can be given to those with poor credit history, making them more available to those seeking temporary financial help.
To make your payday loan experience less stressful, you can prepare yourself in advance for all of the documents and information you might need to have. Save yourself time and energy by preparing in advance for any questions you might have to answer or documents you might have to provide.
Discover what you need for a payday loan.
Regular income
Payday lenders won’t check your credit before giving you a loan, so they use different methods to confirm your ability to pay them back. One such method is to confirm that you have money coming in regularly from a reliable source.
Lenders can ask for up to three months of income proof. You can provide this by showing pay stubs from your last few paycheques.
Proof of identity
When borrowing payday loans, the lender must know that you are who you say you are. It would otherwise be too easy to take out fraudulent loans, which would break the payday lender’s promise to participate in responsible lending.
In Canada, many of these lenders will require that you be a Canadian citizen, and you must be the age of majority or older in your province to qualify. Your identification will confirm who you are and that you meet these requirements.
Chequing account
Most payday lenders will send the loan via direct deposit, especially those located primarily online. For this reason, they will require your bank information to make a direct deposit.
Many of these companies will also set up automatic debit for the date the loan is due. They will automatically pull the cash from your account on that date, ensuring you don’t default on the loan.
Cheque
Although many payday lenders will now use direct deposit and direct payment to send the loan and receive payment, you may also opt to use a cheque.
Most payday lenders who run out of a physical location (as opposed to online lenders) will still accept a cheque post-dated to the loan’s due date. This can help ease your lending experience, ensuring that you don’t have to return to the shop when your loan is up.
Permanent address
One of the key requirements for almost all payday lenders is that borrowers have a permanent address. There are several reasons why this is important and useful information for them. It helps them know where to locate the borrower in case of any issues.
It shows them that the borrower has responsibilities with rent or a mortgage that they can manage; it is also another helpful indicator that they can use to ensure they are participating in responsible lending.
Knowledge
Don’t just sign on the dotted line. Be aware of the company’s policies, fees, and other specifics about the loan. Be diligent about asking questions, gaining knowledge, and reading through all documents you are asked to sign.
You are legally responsible for all of the promises you have made when those papers are signed – be sure you know what you’ve promised. In addition, if you are confused about anything you read, or if you don’t quite understand part of the loan process: ask! You must be fully aware of the situation.
Have a number in mind
Finally, it is better to know exactly how much money you need to borrow, rather than asking for the maximum amount of money you can get. This way, you will pay the loan back more easily, and you won’t get stuck with as many fees.
