A 2020 study looked into how US adults would fare if they get faced with a $400 emergency expense. More than one in three adults said that they would have difficulties paying for the full amount in cash. Another 12% admitted that they would have no means paying for the surprise cost.
While the $400 question was hypothetical, it’s a situation that can happen to you in real life. If there’s one thing that the pandemic taught us, it’s how emergency expenses can arise at anytime.
In such cases, payday advance loans can help tide consumers over until their next “payday”. They give quick access to funds with many borrowers getting the money on the same day they applied.
Who exactly qualifies for payday loans, though? What are the requirements you need to be eligible for a same-day cash advance loan?
We’ll answer all these questions in this comprehensive guide, so be sure to keep reading!
Individuals With Bad Credit
Did you know that there are at least three main credit scoring models used in the United States? These include the FICO score, the VantageScore, and the CE Score. Of these three, most creditors utilize the FICO scoring model.
What’s a FICO Score?
A FICO score is a three-digit number that ranges from 300 to 850. Scores from 800 to 850 are “exceptional,” 740 to 799 are “very good,” and 670 to 739 are “good.” Scores below 670, which 31% of US consumers have, classify as “subprime” scores (fair or very poor).
Qualifying for a Loan When You Have a Low FICO Score
Traditional lenders like banks often don’t extend credit to borrowers with subprime scores. For them, such applicants carry too high of a risk of non-repayment. As a result, they’re quick to deny loan applications from borrowers with very poor (or even fair) scores.
In fact, a poll found that 21% of participants experienced credit denial in 2020. The primary reason for rejection was a credit score deemed too low by the creditor.
You can still apply and qualify for a payday advance loan even if you have a subprime score. As long as you meet the other qualifications listed below, there are payday loan lenders you can count on.
Employees Who Require Small Loans
Cash advance payday loan applicants need to provide proof of a stable source of income. For employees, this can be your most recent pay stubs, wages statement (W-2 form), or 1099 forms (tax statement). You can also supplement these with a copy of the previous year’s federal tax return.
As long as you can furnish any of these documents, you can proceed with the application. The next thing to do is to determine the amount you need to borrow.
Keep in mind that payday loans are short-term loans you need to pay back in full within two to four weeks. This short repayment term is the chief reason payday lenders often set a maximum loan amount of $1,500. However, you can borrow a smaller amount, with the minimum being $100.
It’s paramount that you only borrow what you need and what you can afford to pay back in full within two to four weeks. Non-repayment of payday loans typically results in additional penalties or surcharges.
Self-Employed Individuals Who Need a Loan Within the Same Day
Payday lenders extend their credit services to self-employed individuals, too. These include small business owners, sole proprietors, partners, and independent contractors. Freelancers are also welcome to apply for a payday loan.
What’s important is that you can provide proof of a stable income source. For self-employed individuals, this can be your most recent tax return form. Most lenders also accept the 1040 SE with Schedule C, F, or SE form.
Personal and business bank statements can also serve as proof of income. If you have employees, you can submit copies of their payroll receipts or timesheets. Some payday lenders may also accept bookkeeping or accounting records.
If you need a loan today and can submit these documents, you’re likely to qualify for a payday loan.
Anyone With a Stable Income Source in Need of Immediate Financial Aid
Some payday lending platforms take as little as 12 minutes to process applications. They then immediately notify borrowers about the outcome, either via phone or email. They let applicants know whether the application got approved or denied.
So, you don’t have to worry about waiting for days just to find out if you qualify for a loan or not. In most cases, you’ll know within the same hour, usually through a loan contract. If you receive this, then good for you, this indicates that you qualify for a payday loan.
It’s completely up to you if you wish to proceed. If you decide to go through with it, be sure to read the fine print to determine the payday advance loan rates. Lenders must provide such details in accordance with the Truth in Lending Act.
A Quick Background on TILA
TILA requires lenders to provide a breakdown of the cost of their loan offers. This should include the loan’s annual percentage rate (APR) and applicable finance charges. The contract should also indicate the total amount financed and the date your payment is due.
If you agree to the contract, you can complete the online application right away. If you send the contract back within business hours, you can expect to get the funds within the same day.
In most cases, payday lenders transfer or wire funds directly to a borrower’s bank account. As such, you can expect the loan application to request your bank account details. Once wired, you’ll see the funds reflect on your bank balance.
Apply for Payday Advance Loans Today
There you have it, your ultimate guide on payday advance loans and who can qualify for them. As you can see, almost anyone can qualify, provided they have a stable source of income. If you meet this qualification and you need funds today, consider taking out a payday loan.
Ready to borrow responsibly and get access to funds as soon as possible? If so, then please know that our team here at Payday Loan Help is ready to assist! Get in touch with us now so that we can help you get your loan application started.