Basic Requirements For
Getting A Payday Loan
Payday loans have become very popular lately, both at storefront establishments in many states,
and online. They have been criticized by regulators around the US because of their finance
charges which can sometimes effectively work out to over 800% interest. While some people
take out a cash advance loan or payday loan because they have not explored other lending
options, others simply cannot get a loan from another source when a financial problem arises.
There is no credit check involved with a payday loan, and the income and other requirements are
fairly minimal. There are still, however, some basic standards you will need to meet in order to
be approved for a payday loan.
The first prerequisite, as the name implies, is that the applicant must be employed. Payday loans
are loans against anticipated wages, and those who are unemployed have no security to offer a
lender. Time of employment is taken into consideration by most lenders, and six months at one's
current job is a commonly accepted minimum to get a payday loan.
All lenders will have some minimum income requirement for an applicant to meet. Income
requirements vary from lender to lender, but usually fall between about $800 to $1200 per month.
If your wages are much lower than this, you will probably not be approved.
Although most payday lenders do not run credit checks, they do verify certain personal
information provided by the loan applicant in order to protect their profits. They will verify that
the person applying for the cash advance loan is in fact who they claim to be. In addition to
authenticating a person's name and address information, some lenders will contact employers to
verify employment history and salary. A bankruptcy within the past year will usually preclude
someone from obtaining a payday loan.
The lender must be able to verify the checking or savings account information that the payday
loan applicant has given them. They do this not only to insure that the account is open and valid,
but to make sure the balance is not negative and there are not rampant NSF fees and overdraft
charges present. While there are exceptions, most payday lenders will only extend credit if a
person's bank account is at least six months old.
Finally, most payday loan companies will not give someone a loan if they have any other
outstanding payday loans, either with them or another lender. The reason for this is obvious: a
person who is seeking multiple payday loans may be under water financially, and they are more
likely to default on their loan(s).
If you meet these basic requirements, you are likely to have an easy time getting a payday loan.
Occasional use of these expensive loans in an emergency is not necessarily harmful, but a
dependence on them is a huge red flag that there are some serious problems with your finances.
Consider seeking debt relief services or professional credit counseling. You should also seek to
improve your credit so you will eventually have access to less expensive sources of funding.
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