If you struggle to make ends meet from your monthly salary, you may know what a payday loan is. A payday loan, also known as a payday advance, is a relatively small, unsecured loan. Usually the loan amount is calculated at 50% of the borrower’s salary. However, most companies that provide payday loans do not go higher than $500 or $1000. Since these loans are unsecured, the borrower must give access to the lender to their checking account. Whenever the borrower receives their salary next month, the loan amount is automatically deducted along with a small fee.
However, this is not common practice. Instead, borrowers simply give postdated checks for the full balance of the loan amount. The lender can deposit the check when the loan amount becomes due next month. Hence, common payday loans are structured so that they are paid off in one lump sum amount.
Instant Approval Payday Loans Online
Many companies offer instant approval payday loans online. For borrowers, there are many advantages of applying for instant approval payday loans online. For starters, you don’t have to go through the hassle of standing in long lines and filling out lots of paperwork. Instead, all you have to do to apply for instant approval payday loans online is fill out an application on your computer, scan some documents and send it.
Most companies specify the documents that they require. For instance, you will need to provide proof of where you work and your monthly salary. Your identification documents might also be required, along with your bank statements. This is important because the lending company will want to ensure that you can pay back the loan.
How Does It Work?
When you apply for instant approval payday loans online, it usually takes at least one business day for the company to process your application. The application processing times are much higher if you apply in person (usually between 5- 7 business days). Once your application is approved, the company will transfer the money into your bank account. The company might require you to mail them a postdated check so that they can deposit it when the loan amount becomes due.
The Drawbacks
While instant approval payday loans provide you with a quick injection of funds, they come with several drawbacks. For starters, the amount of interest/fee charged is significantly higher than average payday loans. Usually, companies charge $10- $30 for every $100 borrowed. Instant approval loans have a higher charge and can be anywhere between $20 and $45 for every $100 borrowed. That is why you should only apply for an instant approval payday loan in case of a dire emergency.
