For every person living on the planet, financial security that presupposes real peace of mind is of great importance. That's when you're not concerned that your salary isn't enough to cover the expenses you face or may face in the future, whether it's financial emergency or ambitions related to financial emergency. That said, not everybody can reach the financial security condition, and feel satisfied with a great stability status. In fact, cash becomes the basic salvation in the event of an emergency and you can really sense its importance. If you live in Michigan and don’t feel yourself financially protected during your financial emergency period, you should think of getting a payday loan.
People in America are often used to dealing with financial crisis. There may be countless explanations why financial-related issues occur. And it is even worse when the private financial spendings keep growing and growing. Today's economy's uncertainty resulted in unfaithfulness to the banks by people, particularly when the latest set strict criteria when lending money to people who really need it asap. This demolishes your motivation to continue the process and you start looking for better alternatives when you sense the financial urgent need, but know beforehand that you need to pass a hell-path to accomplish it. Document requirements, timeliness, lengthy application process, perfect credit record are the exact factors that can help you get the desired the cash. Payday loans are the best solution to avoid these conditions, but at the same time get the money you want. They are basically short-term loans that allow you to get rid of your financial obligations sooner. In fact, one of the most important advantages of payday loans is the simple application process and less stringent requirements. Paydays are very simple to get, because you don't need to have a perfect credit scoring, nor do you need to provide a large set of documentation. Everything is a lot easier than you think.
How Payday Loans Work
Payday loans are an excellent opportunity for those who are in need of quick cash, but have a bad credit score. Unexpected events may affect any of us, no matter what the condition of our credit is. In other words, payday loans are small short-term loans, typically given between two weeks and a month, up to your next salary, for which you will have to pay it in one payment. As a result of their increased popularity, a growing number of lenders are willing to offer their borrowers payday loans. It should be noted, however, that not many banks provide such loans, so they are often done by other credit companies, or even private individuals who have a lot of money.
Generally the lender does not perform a stringent credit check when considering your application for a payday loan, and it takes just a few hours to complete the process of issuing cash to you. If you have everything in order with the paperwork and you have a daily source of income, the lender will most likely accept your application.
Why People Use Payday Loans
There are many reasons why people use payday loans. It's not just a matter of getting a one-off expense, like a luxury vacation. When you find yourself in a particular situation, payday loans can be very helpful. Here are seven reasons how you can benefit from them:
- Redundancy. Going through an unemployment period can be really challenging. It's stressful both financially and emotionally. A payday loan can be very helpful for several reasons in this type of situation. Firstly, it immediately gets the money you need. Secondly, it gives you the opportunity to keep living like you have before you lost your job. Thirdly, it has a psychological benefit, that lets you think that redundancy is not that big of a problem;
- Debt Consolidation Loans There is no question that many holders of payday loans take the money out to repay another debt. The loan could be used to pay off another company's debt. And, it might be a debt from a different source like a credit card. If that's the case, particularly if the amount of interest on the loan is marketed as less than what the borrower owes on the other debt, it can make sense to take out a payday loan;
- Avoiding embarrassment. Some people may wonder why these people don't just borrow from family or friends. After all, it's much better than a qualified borrower lending. But many people don’t feel so. This is because if you borrow from a lender, it is a company that owes the money, not someone you know personally;
- Holiday loans. Christmas is a great period of time for lenders. At this time of year, parents are frustrated as they struggle to buy everything their kids want. Consumers, therefore, get payday loans, as they often seem to be the best solution. You get the cash you need for the Christmas period, and then, after you've made some money, you can pay back what you owe in the new year;
- Loans to help with bad credit. You may think that taking one loan from a trustworthy lender is the best way to avoid a payday loan. For example, banks only lend to those with good credit scores. On the other side, you won't get a loan if you don't have a good credit score. It’s totally different with payday loan companies. They are going to provide people with money, even if they have a bad credit history. As such, people are using payday loans in times of desperation;
- Loans for bills. Paying high bills is one of the most common reasons people use a payday loan;
- Medical emergency loans. If you don't have health insurance, a medical emergency will always be a big cost. It could range from 2,000 to a few hundred thousands. It all depends on the type of treatment you need. If you don't pay the bill immediately, like any other debt, it builds in interest. Medical issues are one of the major reasons people use payday loans and short-term loans.
Varieties of Payday Loans
Various types of payday loans are available. Let’s take a look at three most popular ones. Basic payday loan includes providing a certain small amount of money to you in return for signing a document agreeing to repay the loan on time, and enabling the repayment amount to be automatically debited from your account on the payday. You don't have any rules and limitations on how to use this money. Targeted payday loans are another type that let you pay for certain expenses, such as medical bills or utility bills. These loans do not give you the opportunity to spend money for any other purposes. You don't get cash on hand, and the lender must immediately send the amount of the loan to pay your bills.
One other form of payday loans includes the presence collateral, such as a vehicle, which will be your loan repayment guarantee. Since the borrower does not carry out a credit check, he poses high risks, and if you are unable to repay a loan, he will use your car to cover his expenses.
Payday Loan Conditions in Michigan
- You have to be at least 18 years old. It is illegal to lend cash in the United States to an individual below this age. So if you're over 18, you meet the first requirement;
- You have to be a legal resident of Michigan. In order to receive a payday loan in Michigan, you need to verify your legal resident status by providing your contact address. After that, the success of securing a loan is almost guaranteed;
- Your bad credit score won’t be a problem, but you still need a steady source of income, so your salary must be at least $1,000 a month. We need to be sure that you can handle the repayment;
- You need to provide us with a valid phone number and your address, so we can get in touch with you;
- You shouldn't be a bankrupt debtor.
Of course, to have the best payday alternative for you, you should consider lenders on the market. Every borrower or loan firm has its own conditions, advance amounts, charges and obligations. Some lenders might be interested your credit history, while others may just be interested in details of a bank account or financial history.
Responsibility for Michigan Payday Loans
- A loan must be repaid during the specified period;
- A loan is repaid in full amount with additional charges and interests;
- If the loan is not paid in time, an increasing requirement may be imposed.
Such terms may be extended by certain laws. However, the fees are provided, and consumers are required to pay for these loans under the terms set out in a signed agreement.
What Happens if Payday Loans are Not Paid on Time
If you are in a difficult financial situation, you will certainly be interested in what repercussions you might expect if you are unable to pay the payday loan on time. Compared with traditional loans, this form of loan has very high interest rates. This is not so obvious, because payday loans are issued for a short period of time, but if such a loan did not last for two weeks, but one year, you would have to overpay the original loan sum several times. So the more you don’t pay, the more you're going to have to later on. It is worth considering the financial options carefully when applying for a payday loan to avoid late payment and a rapid increase in your debt.
Pros of Payday Loans
Here's why many people turn to payday loans:
- The number one advantage of payday loans is that they are easily accessible. Most cash advance lenders pledge access to cash within 24 hours, as well as an immediate lending decision. Some even have online applications, and work 24 hours a day, 7 days a week. These loan applications may take as little as five minutes, unlike traditional loans, which may take way too long;
- They have less requirements than other loans. Traditional lenders usually require a Social Security number, photo ID, proof of income, credit checks and will verify the ability to repay a loan. This is usually not the case with payday loans, as they are a lot easier to get. Generally speaking, all you need to apply for a payday loan is to be at least 18 years of age; ave a government-issued ID or Social Security number; have a regular job or other regular source of income; have an active bank account. Though having fewer requirements makes it more convenient to get cash, bear in mind that additional requirements from banks and other lenders have often been set up to protect you;
- Unlike traditional loans where you need good credit score to be approved, payday loans do not require a credit history;
- Payday loans are not backed by personal property as opposed to a car title loan, traditional auto loan or mortgage. It ensures that the creditor can not seize your assets if you don’t pay;
- Borrowers can qualify for higher amounts. Some lenders of payday loans may limit the amount of money that some borrowers may have access to. As a borrower, you can only borrow money within the scope of the lender and your income limit. Upon subsequent requests, this number is increased. In other words, depending on your wage or borrowing plan, the cap will be raised. Keep in mind that the amount given as a payday loan in some cases depends on the laws of the government. The borrower will inform you during the loan application process. The best way to establish a healthy relationship with the borrower is to pay off the loan in time.