QUESTIONS & ANSWERS
Frequently Asked Questions
Requirements may vary by lender, but generally, you'll need to provide proof of income, a bank account, and valid identification. Some lenders also require a credit check, but many do not, making it possible for people with poor or no credit to get a loan.
Payday loans are known for their high interest rates and fees. The annual percentage rate (APR) can exceed 300% or more. Fees are typically a percentage of the amount borrowed or a set amount per borrowed increment (e.g., $15 for every $100 borrowed).
The high costs associated with payday loans can lead to a cycle of debt, where borrowers have to take out additional loans to pay off the previous ones. This can lead to a spiral of debt that is difficult to escape.
If you find yourself unable to repay a payday loan, contact your lender as soon as possible to inquire about your options. Some lenders may offer extensions, rollovers, or payment plans. Be aware that these options may involve additional fees or interest.
Yes, it's possible to get a loan with bad credit, but the options may be limited, and the terms are often less favorable (e.g., higher interest rates). Some lenders specialize in bad credit loans, and there are also secured loans, where providing collateral can help offset the risk for the lender.
The time it takes to get a loan can vary widely depending on the type of loan, lender, and your preparedness with the necessary documentation. Some loans, like certain personal or payday loans, can be disbursed within a few days, while others, like mortgages, may take several weeks or more.
Your debt-to-income (DTI) ratio is a measure of your monthly debt payments compared to your gross monthly income. Lenders use it to assess your ability to manage monthly payments and repay borrowed money. A lower DTI can make you a more attractive borrower.
The Annual Percentage Rate (APR) includes the interest rate plus any additional fees or costs associated with the loan, providing a more comprehensive picture of the total cost of borrowing. The interest rate, on the other hand, reflects only the cost of borrowing the principal amount, without including any fees.
A prepayment penalty is a fee that some lenders charge if you pay off your loan early. Before taking out a loan, check if there is a prepayment penalty clause, as it could affect your ability to save on interest by paying off the loan ahead of schedule.
The term length of your loan has a significant impact on the total interest you pay. Shorter loan terms lead to higher monthly payments but lower total interest over the life of the loan. Conversely, longer loan terms lower your monthly payments but increase the total interest paid. It's crucial to consider both your monthly budget and the total cost of the loan when choosing a term length.