A payday loan can be most welcome after an individual has filed for bankruptcy if it is used responsibly. Payday loans are an option worth pursuing when you find yourself short on cash in between paydays. And because the use of a payday loan is not restricted even after bankruptcy, the borrower can spend the loan proceeds in the manner most needed for financial well-being.
What does that mean?
This means that you can use a post-bankruptcy payday loan to cover the cost of emergency automobile repair or to cover medical bills for you or someone in your family. The cash from a payday loan can be put towards a recurring payment such as a mortgage so that you avoid the incurrence of a late payment fee or other monetary penalty.
If you’re wondering how the use of payday loans is possible when several other traditional options for securing additional cash are not, the explanation is simple. Payday loans do not involve checking into your credit history. An applicant’s credit history is not part of the payday loan application process, period.
However, to be approved for a payday loan you do need to meet certain criteria other than having a positive credit history. You need to have had a job for at least the last three months for which you are paid regularly, with your paycheck made by direct deposit to a checking account at a bank or thrift institution. You will need to provide certain information regarding your employment and your bank. You need to be at least 18 years old. But that’s it. Most companies that offer payday loans will approve amounts ranging from $100 up to $1,500 and sometimes more, depending upon your monthly compensation at your place of employment.
As mentioned above, use of payday loans after bankruptcy is not restricted. All you have to do after you receive your payday loan, which will be directly deposited right into your checking account the next business day following loan approval, is to make sure that you will have sufficient funds in your account to cover the loan repayment amount plus the fee on the agreed-upon repayment date, which will be the date of your next payday. On that date, the funds will be automatically debited from your account. Payday loan company policies and state laws will usually allow a borrower to pay fees to extend their loan for one or two additional paydays, but not more than that. These direct deposit cash advances are intended to remedy only short-term financial shortfalls.
You heard it right
Application for payday loans can be accomplished entirely online via a personal computer with an Internet connection. The approval process is not lengthy. In fact, most approvals take less than 30 minutes. There’s no need to fax paperwork or await a decision from an underwriting department. The approval process is nothing like that which you would undergo when purchasing an asset like a home or car or when you’re applying for a personal loan from a credit union. In fact, the term “payday loan” means that the collateral is your next paycheck.