Instant Payday Loans

A payday loan, or advance loan, is a very quick, simple way to obtain small sums of money. A lender, often a small storefront or Web site acting through a larger bank or other financial institution, will grant small amounts of money to borrowers. These amounts typically are dependent on the amount of money a person makes with each pay period. Payday loans are intended as a way to allow the borrower to pay for a certain expense that he or she could normally pay.

Repaying the loan
The borrower then generally repays the entire amount borrowed at one time, usually within 30 days of receiving the money. Most often, the loans are due at the time of the borrower's next paycheck because the idea behind the loans is that the borrower needed money to tide him or her over until the next check arrives. A payday loan is similar to an older system in which an employee could ask an employer for an advance on his or her check for unexpected expenses.

Interest rates
On the downside, payday loans tend to have very high interest rates. The borrower may have to repay a significant interest amount for the short time borrowed, such as 15% to 20% of the borrowed amount. The interests rates are often higher because the lending institution takes a great risk on advancing these loans. Because these loans may be extended readily, companies tend to pursue any default aggressively.

Eligibility
The borrower may not have to provide much proof that he or she can repay the money. She or he may only have to provide a current banking statement and a recent pay stub. Applying online for a payday loan is a rapid process, and many companies will approve qualified
borrowers in minutes. As an additional benefit for someone who may not have great credit, many companies do not require credit checks to lend money.

Benefits and quotes
The ease with which lenders permit payday loans is one of their benefits. These loans are fast and easy, making them appealing for someone who needs only a small amount of money. In addition, because of the low requirements, anyone who is employed may be eligible for some sort of payday loan. Receiving quotes from a variety of instant payday loans can help the borrower find a company with good terms. Some companies offer special incentives to make the loans easier to request, such as an application requiring no fax or a next business-day check.