A payday loan is an unsecured loan that can be issued by a bank or a non-bank financial company. It is provided on the basis of a number of crucial factors which include income, criminal records, possible disputes, etc. Unlike a long-term loan, a short-term cash asdvance is not secured against any asset for which the issuing company cannot execute any attachment in the event of default by the subscriber. For this reason, the financial charges for payday loans are higher than those on bank mortgages, in particular if it is loans granted to bad payers, foreclosed, unemployed, housewives, etc.
As already partially anticipated in the introduction, a personal loan can be used to satisfy any personal financial need, to satisfy an urgency or to face an unexpected expense, such as to renovate a house, to meet the expenses related to the marriage of children, booking a vacation, investing in a business, etc.
Although they vary depending on the bank or financial company, the general criteria for a loan include: age, type of employment, income, ability to repay the money and place of residence. To take advantage of a personal loan, you need to have a regular source of income, regardless of whether it is income from dependent or self-employed work. Retirees can also apply for a personal loan. The suitability of a person is also influenced by the company with which they are employed, his credit history and the total income of their family unit.
Almost everyone, at least once, have heard of the so-called “credit bureaus”: those systems used to assess the reliability of each of us as a potential “debtor”, used by banks and other brokers to decide whether or not to grant loans and loans. It is a topic that is often discussed by hearsay, and around which there are still many doubts and false convictions: such as the idea that in these vast archives of information on our account we also remember our possible trivial forgetfulness of many years ago, that at the right moment will prevent us from getting a payday loan.
Credit bureaus are also referred to as “credit reporting agencies”, or CRAs. They are archives whose function is to collect in a single database the information relating to each customer who obtains a loan or a guarantee from the financial system (ie from the financial intermediaries, ie from the banks or from the financial companies that make credit). In other words: whoever asks for a loan, a loan, a credit – if he gets it – is reported in the CRA, and so his payment history of that debt (whether positive or negative) will be reported.
The CRAs can be public or private; the rules and operating logics are partly different, even if their purpose is the same. Private CRAs, in addition to collecting data on loans of any amount (therefore also very small ones), can also keep information relating to deferred or installment credits granted by companies participating in the archives in the exercise of a commercial or professional activity (for example, energy suppliers).
Borrowing money is a risky business, as anyone who has lent money or even just books knows well: because they expose themselves to the risk that what was loaned will not be returned.
CRAs can retain positive and negative credit information. Positive information is given to requests and credit reports in progress and with a regular trend; negative information that instead relates to relationships for which defaults have occurred, or delays or missed payments.
A point to consider is that your inquiries made with lenders will be noted on your credit report. A series of inquiries made within a fortnight will be considered as one event, but it is advisable to avoid extending your search for a lender for a stretch of time longer than two weeks. The negative effect of hard inquiries wears off after a certain time has passed. But too many inquiries will decrease your odds of getting approved for a short-term loan.
Intermediaries can access the data of the total debt exposure of the reported subjects both to monitor how the existing relationships with their clients are going, and by formulating a request for first information, ie when they have to evaluate the creditworthiness of new for the first time.
In many cases it is possible to monitor the progress of the request directly on the website of the online bank or the credit institution to which the request was made; in any case it will be the institute itself, in case of successful outcome of the practice, to send a copy of the contract via e-mail, which will have to be signed (with digital signature in the case of an online loan with digital signature) and returned to the sender according to the established methods.
Thanks to immediate online loans, you can get financing in just 24 hours or a little more thanks to an online procedure that makes the transaction much faster than the process that you should follow at a normal bank counter.
However, there are limitations: the procedure for obtaining an urgent online loan is really rapid, but it allows access to limited amounts of money, usually no more than $1,000, the amount being a subject to variations from state to state. However, a payday loan remains an excellent solution for those who need a small amount of money in extremely short time.