Table of Contents
What are instant payday loans?
Payday lending is a common practice all over the world. It is not uncommon for people to borrow instant payday loans to ensure a steady cash flow instead of having to wait for their paycheck to mature. Instant payday loans are simply loans that are very flexible and short-term in nature. The amount offered for these loans is not that large and in most cases is approximately £ 1,000. The loans are provided to people (borrowers) who are supposed to repay them and the interest gained as soon as they receive their next paycheck. In other words, the loan is supposed to be repaid within 30 days. The amount given to borrowers is usually in one lump sum. In most cases, the amount is transferred electronically to his or her bank account.
What makes people to seek instant payday loans?
The ever-rising standards of living force people to look for ways to supplement their income in a bid to meet basic necessities. Most importantly, every day people are faced with all sorts of financial emergencies (unexpected home renovations, hospital expenses, education expenses) that needed to be dealt with as soon as possible.
Millennials have high debt, low financial resilience – The Malaysian Insight Rasheed also cited the Financial Capability and Inclusion (FCI) Survey conducted in 2015, in which more than 75% of Malaysians were found to have difficulty raising even RM1,000 in an emergency. That survey found 32% of Malaysians had enough to …
These emergencies require instant cash which at times individuals may not readily afford. Since instant payday loans do not require any form of collateral and can be applied online, they are preferred for handling such financial emergencies.
How are instant payday loans obtained?
Traditionally, obtaining instant payday loans involved physically going payday loan financial institutions. But due to improvements in technology, instant payday loans can be obtained online in a speedy and stress-free process.People can now apply for instant payday loans online by using mobile phones. Click To Tweet
The availability of many online payday loan service providers who mostly offer 24/7 services ensures the loan application process takes as little time as possible. If the application is successful, a loan agreement is provided to a person. Thereafter, a person is connected to a lender who conducts an affordability check. Once the lender is satisfied, a person is allowed to signs the loan agreement which completes the process of getting the loan. The borrower receives the amount in the provided bank account within one business day after the loan application goes through. Some lenders transmit the money through mobile wallet transfer while others use bank wire. However, this service is not common among most payday loan lenders.
Requirements to get approved for an instant payday loan
There are certain things that payday loan providers consider when people apply for instant payday loans. They are:
- A stable source of income or job
- A credible email address
- A bank account
- Documentation (an ID issued by the government) showing you are 18 years and above.
In addition, before an instant payday loan is approved and process, a person is required to provide the following as well:
- Current bank statement
- Current paycheck
- A blank cheque
To conclude, the good thing about instant payday loans is that they do not pay attention to the credit status a person. For a person to get a payday loan, the loan providers examine his or her financial situation and salary. All the same, instant payday loans attract higher interest compared to long-term loans. This is because they are meant to be offered over a short duration of time. As such, they should not be borrowed just because they are readily available. They are not in any way an extra source of revenue. If not put into use well, they can lead to unwanted and repeated debts. They should only be used when there is a genuine financial emergency that needs quick cash.