Things to Know Before Your First Loan Application
How to use payday loans in order to calmly and confidently repay the debt on time? What things every person should know before the first application.
How to use payday loans so as not to get into debt?
Today, there are a number of microfinance organizations on the market that issue loans to the population. In many situations, the services of these companies can become a real lifesaver. A vivid example is the need to pay for rented housing in case of salary delay. In addition, it is very easy to get online loans. This often requires only an ID (sometimes 1-2 additional documents, and sometimes optional), collateral and guarantors are not needed. You can apply online using any mobile or stationary device with Internet access in just a few minutes. With a positive decision, money is credited very quickly – most often instantly. But before you take out a short-term loan, you need to make sure that you do not fall into a debt pit.
Make sure that you need to address a microfinance organization
If you need to urgently pay the rent of an apartment tomorrow, because otherwise you will be given the key of the street, you can and should take out a payday loan. But if you do not have enough money to buy a new phone with the serviceability of the existing one, you should think about it. Do I have to overpay interest for using the loan? Maybe it’s better to wait for the salary and save up? Of course, it happens that some products have short-term promotions and discounts. In this case, the benefits of an instant purchase and the overpayment on the loan should be weighed. By the way, if you still decide to save up, then during this time you can find out that the goods that seemed necessary may not become so necessary.
Situations when a person does not have a stable source of income deserve special attention. Usually payday lending services do not require its confirmation. There are pros and cons to this. On the one hand, the unemployed have a chance of receiving urgent financial assistance. Sometimes this is justified – for example, if you find yourself in a strange city, your wallet has been stolen and you need to find funds for a ticket home. But if, in the absence of work, money is needed for something not so necessary (entertainment, a gift to a loved one, etc.), it is better to abandon this idea. After all, it is worth understanding that the money will need to be repaid soon. If you fail to find a job as soon as possible, problems may arise. All of the above does not apply to people who have an unofficial but stable income. If you are sure that you will repay the debt on time, you can take out a loan.
Amount, terms and rates
The choice of the amount of a quick loan should be approached extremely seriously. If you borrow more money than you need, you will have to overpay. After all, the amount of interest directly depends on the amount. At the same time, make sure that it will be sufficient. If, in order to save on interest, you take a little less than you need, you will not be able to get an additional loan from the same microfinance organization until you repay the previous one. Of course, you can contact another lending service. But then you will have to pay interest on this loan as well.
As for the term – here, you need to carefully weigh everything. Let’s assume that you get your salary every month on the 11th and decide to take out a loan before the corresponding date. Are you sure that the payment will not be delayed? If this happens, it makes sense to be safe. But it is also not necessary to specifically take out small loans for too long period. After all, interest will be accrued every day. And the more of them, the more difficult it will be to repay the debt.
Before signing the contract, do not be lazy to read it carefully. Pay special attention to information about the amount of the quick loan, loan terms and interest rate. Make sure that the lender does not charge penalties for early repayment. Check out the rate of the penalty.
What should I do if a delay is imminent?
The main advice is not to try to hide from the representatives of the microfinance organization. If the MFO wants to collect a debt from you, it will find you (independently, with the help of collectors or through the court). If you understand that it is not possible to return the funds on time, contact the microfinance company yourself. It is quite possible that it will offer you to pay only interest, thereby prolonging the loan. Some MFIs have restructuring and refinancing programs.
How can I get a loan for the first time?
To take out the first loan without interest, the borrower must meet the requirements of a payday lending service. They include:
- citizenship of the United States;
- Age – 18 years old (in some companies – from 21 years) to 65-70 years old;
- Active credit card (bank account, electronic wallet);
- Stable income (official or unofficial).
Of the documents, as a rule, only an ID or a driver’s license is needed. To increase the chances of approval, you can use the income statement.
Tags: finance, online loans, payday loans