Qualifying for a Payday Loan Tips
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Comparing Loan Qualifications for Payday Loans and Mortgage Loans
The loan qualifications for payday loans and mortgage loans are considerably different. However, considering the maximum loan amounts associated with these loans, these differences should not be surprising. While payday loans are often limited to a maximum of approximately $300 to $1,500, mortgage loans may be limited to hundreds of thousands of dollars or even millions of dollars depending on the applicants income, assets, debt-to-income ratio and credit history. Also, it should not be surprising that the loan application for a mortgage loan is much more involved than a loan application for a payday loan.
The loan application for a payday loan can often be completed by the applicant in a matter of minutes and the loan may be processed and approved in as little as 24 hours. The applicant is only required to provide basic information regarding his identity, employment status and bank information. However, an application for a mortgage loan is considerably more involved and applicants are required to provide much more information including employment information, tax information, pay stubs, bank statements, information on current debts and credit history information.
Qualify for a Loan with Bad Credit or No Credit
Payday loans are ideal for borrowers who have bad credit or no credit. This is because unlike traditional loans, payday loans do not depend on the applicant's credit history. In fact, most payday lenders do not even check the applicant's credit history. This information is not necessary because payday loans are based solely on the applicant's ability to repay the loan. The lender makes this determination based on the applicant's monthly income. Therefore, the approval process for a payday loan relies on the lender being able to verify the applicant's net monthly income. Based on this information the lender can determine whether or not they applicant is able to repay the loan.
Understanding Loan Requirements for Payday Loans
The loan requirements for payday loans are much less complicated than the requirements for traditional loans. This is important because this type of loan is designed to assist borrowers in need of quick access to cash. The loan application for payday loans is often very simple and only requires the applicant to provide basic information related to his identity, employment status and banking information. This information enables the lender to determine whether or not the applicant is capable of repaying the loan on the following payday.
Payday loans are typically not for a great deal of money and may be further limited by the borrower's income level. Most payday lenders limit the amount of payday loans and these maximum limits can vary tremendously. Some lenders may limit borrowers to $300 while others may allow a maximum of $1,500. It is also important to note some lenders may place stricter limitations on first-time clients as opposed to clients who have borrowed from them in the past.
Loan Qualifications for a Payday Loan
The loan qualifications for a payday loan are usually quite minimal. Applicants may only be required to provide basic information including information relating to personal identity and employment status. The first step in the application process is to complete and submit a loan application with all of the required information, as well as any necessary application fees. Once this application is submitted, the lender will usually review the application rather quickly and the loan may be approved in as little as 24 hours. However, different lenders will have different criteria for reviewing payday loan applications. Many lenders can process and approve applications received before 3 p.m. on the following business day.
The Importance of Borrower Income in Securing a Payday Loan
Borrower income is an important consideration during the payday loan application process. This is because most payday lenders base loan approval solely on the applicant's ability to repay the loan as opposed to considering factors such as credit history and debt-to-income ratio. Payday lenders may have different methods for establishing a minimum borrower income to qualify for a payday loan.
Some payday lenders set a minimum monthly net income as a part of their loan approval process. This minimum monthly net income is usually approximately $1,000 per month. However, other lenders allow applicants who net less than $1,000 per month to qualify for smaller loans. Monthly income can be verified by providing a recent pay stub or having the lender contact the employer directly.
Understanding an Unsecured Loan
An unsecured loan refers to a loan which is based solely on the borrower's ability to repay the loan. This differs from secured loans which require the borrower to use an asset as collateral for the loan. This means the lender will be able to use this collateral to recover funds if the borrower defaults on the loan. This gives the lender a great deal of security and as a result the lender is often able to offer lower interest rates on the loan.
A payday loan is one example of an unsecured loan. This type of loan is based solely on the borrower's ability to repay the loan as opposed to his assets. The lender bases the loan amount on the applicant's net monthly income and sets the maximum loan amount to ensure the borrower is able to fully repay the loan on his next payday.
No Faxing Payday Loan Qualification Process
The qualification process for a no faxing payday loan is typically much less complicated than the qualification process for traditional loans such as mortgage loans, vehicle loans and even personal loans. This is because a no faxing payday loan is typically approved based on the applicant's monthly income, while other types of loans are approved based on a complicated combination of factors which may include income, credit history, debt-to-income ratio and other factors.
Typical qualifications for receiving a payday loan include verifiable employment and a net income of at least $1,000 per month. Additionally, the lender may require the applicant be employed by the same employer for more than three months and not have filed for bankruptcy in the past three months. The lender may also require the applicant not have more than two outstanding payday loans when applying for another no faxing payday loan.
Verification Process for Faxless Payday Loans
The verification process for faxless payday loans is usually quite simple. The applicant can supply the lender with the majority of the required information either online or over the telephone, eliminating the need to fax documents to the lender for verification purposes. However, most lenders will require the applicant to have his bank fax a copy of his most recent bank statement to them during the application process.
The other information which must be provided when applying for a faxless payday loan is the applicant's identity and employment status. The applicant can generally provide the necessary information to verify his identity over the telephone and the lender will be able to verify employment information by contacting the applicant's employer via telephone.
Get Cash with No Faxing Required
Those in need of a relatively small amount of money can get cash with no faxing required in the form of a payday loan. A payday loan is a loan which is typically issued based on the applicant's income and the repayment period is usually very short. Most payday loans require the borrower to repay the loan in full by the second payday after the loan is approved. Depending on when the loan is issued, the borrower may even be required to repay this loan by the first payday after the loan is approved.
The information required to secure a payday loan is usually proof of identity and proof of employment. This information can generally be provided online or over the telephone, eliminating the need to fax documents to the lender during the application process. The lender may require the applicant's bank to fax a copy of his most recent bank statement during the application process, but the applicant will not be required to fax any information directly to the lender. Even his employment information can typically be verified by having the lender contact the employer.
Qualifying for an Advance Cash Loan
An advance cash loan is different from a traditional loan because the approval process focuses on the applicant's income as opposed to a combination of factors. The applicant needs to meet certain qualifications such as being over 18 years of age, netting more than $1,000 in income per month and having a bank account with direct deposit. However, there may be other qualifications required by the lender, such as having the same employer for more than three months, no more than two outstanding payday loans and no bankruptcies filed within the past three months.
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