Payday loans are loans that are secured on your salary or wages. They typically offer amounts that range from $200 to $3000 and can be obtained online in just minutes.
The defining feature of a payday loan is that the loan term will never exceed 40 days, however, there are lenders who call themselves payday lenders but offer longer loan terms or multiple installment repayment terms.
These fast loans are better known as installment loans but for the purposes of simplicity both those that offer 40 day repayment terms and 3 month repayment terms are considered to be payday lenders. Although payday loans can bail anyone out of a bad situation - they are one of the most expensive forms of borrowing and should not be used as a long term solution to income and cash flow shortages.
Top Advantages of a Payday Loan
- You can apply for a loan by completing an online loan application and save yourself the hassle of having to wait in a queue
- You can have the loan credited to your account of the same day and in some cases within hours
- You can get a small amount of money - loan amounts which banks and other lenders don’t offer
- The loan term is usually 30 to 40 days so you're not committing to long term debt
- The repayment or repayments are deducted automatically on your payday
- Most lenders allow existing customers can apply for an instant loan by logging into their accounts
Important Points to Note:
Where you can get a Payday Loan?
Payday loans can only be obtained from an alternative lender and are usually offered by online operators. Since the loan amounts are very small and the loan terms very short they are able to provide cash loans without having to meet the customer in person or have them complete any paperwork.
In addition, customers who use a particular lender once will likely have their details stored in the lenders system and will be able to access loans instantly as well as borrow more money than first time applicants.
Payday Loan Application Requirements
In order to apply for a payday loan you must be employed in a full time position and earning a regular income that is paid straight into your bank account either fortnightly, weekly or monthly. You must be 18, a citizen or resident of New Zealand and b able to provide an identity document (photo ID) in support of your application. These requirements are very straightforward and simple and allows just about anyone to take out a loan.
Payday Loan Processing Times
While most payday lenders will claim to offer 60 minute loans or instant loans - you will have to wait at the very least an hour to have you application reviewed and your loan approved.
Some lenders may even process your loan on the day you apply and credit it on the next business day which could have you waiting for up to 24 hours. The maximum time that is acceptable for a payday lender to have you wait is 48 hours - if this time frame is exceeded the lender and the loans has not met its purpose.
If you really need the fastest possible solution than you must look for a lender that specifically guarantees a same day credit transfer. Another good tip is to look for a lender that makes use of an automated pre-approval so that you can quickly determine that you will be able to get the loan amount you need and that you meet that particular lenders minimum requirements.
While most personal micro-loan provider like payday lenders will not run a credit check and will base their lending decision solely on income there are a few lender who will check your credit and this may be something you want to consider before applying.
Using a Reputable Lender
When it comes to payday lending it's best to identify lenders by using a loan comparison or loan listing website to ensure that you are dealing with a reliable and reputable lender. This is because there are many fly by nights and unreliable lenders lurking on the internet that will not only overcharge you but may cause you security and privacy issues.
Our list of payday lenders include New Zealand's most popular and trusted providers who are all registered and regulated by the country's relevant authority and will ensure your loan is processed, delivered and repaid without incident.
Comparing Payday Cash Loans
When comparing payday loans it's best to make use of the lenders daily interest rate as this is more readily available than the APR. Taking the lenders fees into consideration is also important as some lenders may not have any fees while other have multiple fees which will significantly increase the cost of borrowing.
Using a loan comparison platform is ideal for identifying the lenders who offer the best rates and the most ideal loan amounts for your particular needs. As mentioned, for people who are looking for a same day loan solution comparing the average turnaround times for various lenders may be worth your while.
Uses for a Payday Loan
Payday loans are more mostly used to tide people over until their next payday. These loans offer a small amount of money so are ideal only for smaller expenses such as car repair bills, school fees, doctor consultations, travel expenses and holidays.
They are ideal for emergency situations where you have run out of money and cannot wait until your paycheck arrives or when you anticipate that you won't have enough for bills and need a safety net. Although the high cost of a quick loan may have many people nervous about taking one out - it's certainly not the end of the world since it is not a long term debt commitments and will be repaid by month end.