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What is a payday loan and how does it work?

If you have an urgent need for cash such as an unexpected bill or expense, a Payday can bridge the gap until your next paycheck. Things come up and if you find that you don’t have the necessary funds and payday is still too far away, you might consider using this service to get the cash you need.

A payday loan is a short-term loan that uses your employment to qualify instead of credit (see Zebra Loans). The loan can be repaid through regular installments or all at once from your bank account. Because interest rates vary and can be high in some instances, it is recommended that you use them only as a last resort or only for emergencies.

Here is how it works:

To qualify for a loan you must:

  • Be 18+ years old
  • Be a resident of New Zealand
  • Be employed for more than 3 months
  • Earn a minimum of $400 per week
  • Have an active bank account
  • Have a bank statement or utility bill
  • Have a mobile phone and email address

The Application Process

Fill Out Forms

Decide how much you want to borrow. Loans are typically between $100 – $1,000. On the application, you will be asked when your paydays are and how much you are paid. You will have the option to choose how many payments you wish to make to repay the loan. Complete and submit the application.

Qualifying

The company will check the information provided on your application, including contacting your employer and any references you put down and make a decision within 24 hours. If you qualify, you will receive a notice and the funds will be sent to the bank account you provided.

Funding Received

Once you receive the funds in your account you are free to use them as needed. Your account will be debited each payday for the amount you listed for repayment of your loan.

Things to Remember:

This is a debt that must be repaid on the schedule that you agreed to when you applied. Some loans are reported to the credit agencies so you will want to be prompt in your payments to avoid negative marks on your credit record.

If you run into problems and can’t pay on time contact the lender and try to make arrangements for payment. Often times if you’ve had a good record of paying on time, they will be willing to work with you for a resolution.

Payday Loans are a source of quick cash for bills when you need it. If you don’t want to rely on your parents for money and have a permanent job you may qualify for a loan. Use credit wisely and repay on time to avoid additional fees and interest.

How to make applying for bad credit loans easier

There are ways to make applying for bad credit loans much easier than you may think, and most of it boils down to doing your homework before you begin to apply.

In other words, follow these quick tips on how to apply for bad credit loans, and you should find yourself with a loan that is far more affordable than you expected it to be.

Transparency in interest rates and loan terms — Any bad credit loan you accept should have transparency in both interest rates and in the terms of the loan. This means that none of the information about monthly repayments, interest rates or possible penalties should be hidden. Any company that hides important loan information is often one that is trying to cheat its customers.

Registration as a business in your state — You should only go with a loan company that is registered to do business in your state. After all, you want to be sure you are protected should something untoward occur, and choosing a lending institution with registration in your own state goes a long way towards ensuring this.

Does the lender report payments to all major credit bureaus? — As you already have a bad credit rating, and so have been forced to apply for bad credit loans, you should be doing everything you can to improve it.

One thing you can do is make payments on time for any loan you take out. This will help you improve your credit rating, as long as the lending company reports those payments to major credit bureaus. If you are not sure, be sure to ask, as one that does not will not help you improve your credit rating at all.

Be careful about the collateral you offer — As you already have a bad credit rating, and so are stuck only being able to apply for bad credit loans, you may be asked to offer collateral against any loan you take out.

If so, be careful the collateral you offer is not only something you can live without, but is not going to put you into even further debt should the worst happen.

High interest rates but not exorbitant high rates — With bad credit loans, you may be expected to pay 20 percent or more interest on the loan you take out. Unfortunately, this is pretty normal for bad credit loans, as the lending institution (for example, NeedMoneyNow) does it to more easily protect themselves from a high risk loan.

Should you be offered an interest rate above 25 percent, however, this is very likely to be a company that is less than reputable. Be very careful about the interest rate you are willing to accept, and avoid those with exorbitantly high rates. Otherwise, your monthly repayment amounts could end up being too high.

5 Tips on Qualifying for a Loan in 2019

Loan requirements have changed continuously over the years. Although different countries have different loan requirements, some factors are constant. These factors are also constant regardless of the loan nature. Even though some easy loans New Zealand
such as car loans and mortgages may have lengthy processes, the same requirements apply.

First, it is important to understand the type of loan you are applying and make the request specific. Ambiguity in the financial world is unacceptable, and it is, sadly, the main reason why many people do not qualify for loans. A personal loan, for example, may have a different set of requirements compared to a mortgage or a car loan. Understanding the nature of the loan dictates the lending period and the repayment criteria. Understanding these factors is one-step to a successful application.

Second, it is important to have a good credit record. Financial institutions are willing to give loans to people with a good history in repayments. You should evaluate whether you have a good credit score or not. Fortunately, there are different ways to calculate the credit score. If you do not have a good credit score, it is important to pay your existing debts as this helps in raising your credit score and in return improve your chances of getting a loan. Whether you want a loan or not, keeping your credit score higher is encouraged for future loan applications.

Thirdly, documentation is important in any loan application. Although the world is quickly embracing the digital reality, most loan applications procedures require documentation. The nature and the type of documentation, in this case, differ from one loan to another. If the loan is for business, the financial institution will need to see your financial statements, accounts payable and receivable and more importantly, all tax returns. If the loan is personal, the financial institutions expect personal documentation such as tax compliance and proof of steady income.

Fourthly, before applying for the loan, it is advisable to check and pay all tax liens. Every financial institution will be hesitant to give you a loan if you have not filled your taxes. Thanks to changes in the taxation world, you can pay all outstanding taxes at once. Filling these returns helps in raising your chances of getting a loan. While filling the tax returns, it is important to note that regardless of the tax obligation, (federal tax or state tax); failing to produce papers or proof of tax payments is one-step to a failed application.

Finally, as a loan applicant, asking the right questions is important. Thanks to changes in the financial world, financial institutions are accessible through their representatives. As an applicant, you need to ask the right and important questions related to the loan you intend to apply. You should ask the financial institution’s representative the specific documentation required and the loan eligibility. Understanding the financial institution’s perspective helps you as an applicant to be precise and in return maximize your application chances. Having the right information also helps in saving the loan application time.