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Pay day loans or cash loans are available even for those with less than perfect credit standing. In fact, it may even be the only option possible when it comes to financial aid for these individuals. Yes, the world of credit cards and major loans such as mortgage, car loans, and the like are not within the reach of those with poor credit scores or financial history. But with pay day loans or cash loans, a borrower who lacks an excellent credit track record can still be able to borrow money and take care of urgent monetary needs.
Purposes of Pay Day Loans
Pay day loans can be used for various purposes. Although the amount which can be borrowed is limited, it can at least be spent for important reasons including emergency hospital or medical bills that are not covered in an insurance policy; domestic expenditures such as unexpected repairs or utility bills; car repairs; significant purchases such as a major sale you simply cannot miss; travel expenses for an important event with family, relatives, or friends; school projects and related expenses; budget allowance for yourself or the family; and other types of expenditures.
Why cash loans are approved for borrowers with less than perfect credit standing
As to why exactly are cash loans approved even for everyone with poor credit reputation, here are some of the reasons:
Borrower has a stable income
Although an outstanding credit status is not necessary for pay day loans, most lenders require borrowers to have a stable income. This means the person has to be employed for at least 6 months. The employed individual must also possess a valid social security number and an active bank account. The latter will be used to deposit the loan amount and will also be utilized to automatically debit the payment for the loan within the specified repayment period.
Amount involved is minimal
Most cash loans amount to $50 to $500 on average with 1,500 on maximum. With the amount involved being minimal, there is at least assurance that the borrower can pay the lender within the period agreed upon which is normally within one week to one month (three months being the most). As mentioned in the previous paragraph, payment for the loan will also be automatically debited from the borrower’s bank account to ensure payment and to avoid interest rates or charges for paying late.
With the monetary amount not being substantial enough, a thorough credit evaluation may not even be imposed. Thus, approval period for pay day loans are normally expected within a few hours up to 24 hours. The longest waiting time for approval can be at 5 business days. But as soon as the loan is approved, the money is then credited to the borrower’s bank account electronically. There’s no clearing period here. The money can be withdrawn and used right away.
Still in relation to a speedy process, even the application for cash loans can be finished in as quickly as 5 minutes. All you need to do is to fill out a form online. This can be completed in the comfort of your personal computer at home or in the office.
With pay day loans or cash loans and the reasons stated above; everyone, even those with less than perfect credit standing can avail of an immediate financial assistance.