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Payday loans are short term loans that help you meet your financial needs. Usually, people go to a bank to get this type of loan when they are in an emergency and need financial support. However, the catch is that if you fail to return the loan amount, you will have to bear a heavy amount of interest, which is, sometimes, 200% of the principal amount. So, If you have to pay your loan back on time, you may need some help. Failing to pay back the loan on time may create more problems for you down the road. Given below are 5 tips to help you with this. Read on to know more.
1. Consider your needs
Before you apply for a payday loan, we suggest that determine your needs first. Once you have understood your needs, you should not borrow more than what you need. Smaller amounts are easy to pay back than larger ones. Therefore, you should borrow the smallest amount possible to meet your needs. After all, your purpose to apply for the loan was to deal with an emergency. It’s not a good idea to opt for this option to buy something you want, such as a smartphone or camera.
2. Use what you need
Once you have got the loan, use as much amount as you need. For instance, if you borrowed $2,000, say, and you spent $1,000 to meet your needs, don’t spend the rest of the money on something you don’t need. Instead, you should put that money aside for repayment of the loan.
3. Set your priority
If you want to payback your payday loan, we suggest that you commit to the task. What you need to do is make you payments on time no matter what. If possible, you should get money from other sources to pay back the loan. For instance, you can sell something you don’t need on eBay, volunteer for a few days or work overtime. So, you may want to set your priorities should you want the bank to accept your application.
4. Electronic withdrawal
You can prevent payment delays if you let your lender withdraw funds from your account. This can cost you a lot of money. If this option is not feasible, you may have to repay the amount the expiry of due date. Failing to pay the loan on time will incur penalties and fees. However, you may want to keep in mind that online lenders require you to give them authorization for fund transfer.
It is a good idea not to take a payday loan unless you have an emergency. These short terms loans are designed in order to help people deal with unexpected situations and circumstances. So, they can be used for the purpose of covering emergency expenses.
Therefore, if you are habitual of taking out payday loans for ongoing situations and impulse purchases, you will find yourself in a lot of trouble down the road. These loans are not granted to help people buy the new model of their favorite smartphone.
As a matter of fact, your first priority should be to pay off your payday loan as soon as possible. This is the most important thing that you may want to keep in mind when applying for this loan. This will help you prevent things from making worse in the future.
Long story short, if you have been in trouble, we suggest that you borrow funds from your friends, relatives or colleagues. Payday loans should be your last resort when you have no other option to consider. Hopefully, these tips will help you make the best choice.
Getting a business cash advance is simple and easy for most small businesses, and even those who have poor credit scores. While this does not apply to bank loans, these are the requirements of private lenders, and private lenders are among the leading fund at this time.
Most business owners who are looking for funding and are unaware of the current requirements and developments of the financial sector, visit their local bank. This is the way people believe a loan is to be obtained, via the bank. However, banks are not very enthusiastic about funding small business, and as a result a whole new industry has cropped up to meet the demand.
Private lenders often fill the gap between businesses and banks. There is the very large segment of small businesses that are stuck in the middle, who don’t qualify for bank loans and yet require financing. Private lenders fill this gap providing many of them with the much required business cash advance in the USA.
The services provided by private lenders
The funding that private lenders provide is typically known as MCA or merchant cash advance loans. These kinds of loans are short term loans that are for a maximum duration of 12 months. The repayment options are easy and flexible, and small business owners can work with the fund to set the method that most suits their requirements.
The application process to apply for a business cash advance is simple and quick, with the private fund generally requiring basic information, and a lot less than those of banks. The basic information required by private lenders to provide an MCA are as mentioned here.
1. How old the business is
2. The gross monthly sale of the business
3. How much they require
4. Purpose of the funds i.e. working capital, business expansion, purchasing inventory, purchasing equipment etc.
5. If the business owner has other loans and if he or she is in bankruptcy.
These are some of the basic types of questions that a small business owner who is applying for an MCA would need to answer. The outstanding difference between an application for an MCA and bank loans is the fact that banks require detailed information related to financial statements. Private lenders basically need a broad picture of the ground realities of the business applying for the loan. Unlike banks all decisions are not based on the statements of the small business.
While banks and private lenders may have a different way of looking at things, private lenders do take care to ensure the ground realities of the small business are as they should be. Banks rely heavily on financial statements when reaching a conclusion related to funding a business.
Features of the MCA loan application process
While it is possible that you will be asked about your credit score even when you are going to apply for private funding. The credit score is not a determining factor for an MCA. These loans are unsecured loans and as a result collateral and security are not required as well.
When credit scores, collateral and securities are not holding back small businesses, the possibility of getting funded is a lot higher. These are the basic weak areas of most small businesses, which hamper their ability to get funded by in large. When these weak areas are removed from between a small business owner and the funding they seek, the process becomes a lot smoother for them.
Collateral is something that most small business owners find difficult to show. Typically, only with a private lender can a small business owner expect to receive a business cash advance with bad credit.
Another great feature is the fact that small business owners can receive the funding they require very quickly as well. The quickest a business owner can receive the money in their business account is 48 to 72 hours, from the time they submit a complete application. At the latest this time frame would be a week or two. Banks on the other hand are in no particular hurry to provide business funding, and a realistic time frame would be a couple of months to receive the money.