When in need of dire financial aid, payday loans have the capability of proving out to be a real friend in need. Lot has been said and discussed regarding these payday loans. Though its concept, working and features are simple but still like any other financial product this too has its fair share of issues and mis interpretations. Through this article which aims to cover the most frequently asked questions regarding payday loans Finance-strategy.com intends to remove the gap between the product and the probable customer.

What are payday loans?
Payday loans are short term loans aimed to take care of emergency situations. These small term loans are unsecured and hence do not need the submission of any form of security. these loans are offered to the borrower until his next payday and the amount which can be loaned via these payday loans vary between $100 to $1500.

What is the eligibility conditions required to avail payday loans?
Any person who is 18 years or above in age and is a regular salary drawing employee in a company whose minimum salary is $1000 is eligible to submit his application for this loan and have a fair chance of getting it approved.

Is any kind of bank guarantee a pre requisite for this kind of loan?
No, there is absolutely no need of any kind of bank security as payday loans are unsecured loans and do not need any deposition of any sort of collateral.

Are self employed individual’s qualifying prospects for payday loans?
Since self employed individuals suffer from sporadic income and absence of paycheck regularity therefore they are generally not considered to be eligible for payday loans.

Do applicants whose applications have been rejected be banks on basis of them possessing a bad credit history stand any chance in getting a payday loan?
Since payday loans do not engage in credit history checks therefore all individuals who do not have a good and an impressive credit history to boast of too can utilize the facility of instant payday loans.

What is the necessary documentation needed for payday loans?
Since payday loans are characterized for their speedy processing therefore no major documentation is essential. One may have to give details proving your employment and your bank account details wherein you wish to get the loaned amount deposited.

Generally how long does the application form take to get processed and then for the loaned amount to reach the account of the borrower in case of payday loans?
The acceptance of the application letter in presence of all required proofs is a matter of a few minutes and can even be done online. As for the time taken for deposition of money in the account, well it differs from company to company and is a matter of company policy. In general, most of the cases have taken 24 hours for transferring the money to the borrower.

What are the methods of paying back the loaned amount?
Generally payday loans are issued against a post dated paycheck given by you which in future is taken as the mean to repay back the loaned amount. Also, there is the option of automatically depositing the money to the lenders account on a pre decided date by electronically linking your account to your lenders account.

How harsh are the penalties in times of delayed or faltered payment?
The most common action taken by the lender in cases of delayed or faltered payment in case of payday loans is to make the borrower pay additional interest on the loaned amount and in severe cases even initiate legal proceedings against the guilty.

What are the rates of interest generally charged on payday loans?
Since these payday loans are generally for a very short period of time therefore as expected the rates of interest are pretty steep. These interest rates when expressed in terms of APR can vary anywhere between 390% to 780%.