Quick Guaranteed Payday Loans

Payday loans, also commonly referred to as paycheck advancement loans, are loans that are typically used by subprime borrowers (individuals with poor credit) to pay for urgent expenses. Although almost anyone can obtain approval for payday loans, the interest rates, terms, and conditions offered on these loans are usually less appealing than those applied to conventional loans. This is because lenders have to mitigate the risk of lending money to individuals that have a poor credit history and are known for being financially unreliable. Many people with poor credit that are in desperate need of financial assistance have no choice but to seek an advance on their next paycheck in order to cover urgent living expenses. Nonetheless, quick guaranteed payday loans can be beneficial in providing much-needed financial aid when used properly.

Why Do so Many Lenders Offer Quick Guaranteed Payday Loans?
According to many lenders, approximately 99% of applicants are approved for payday loans because of the relatively low risk that lenders take in providing them. There are a number of reasons why payday loans are safe for lenders, including the fact that many lenders require the applicant to authorize an automatic transfer from the checking account on the date of their next direct deposit from their employer. This ensures that the lender will be able to obtain repayment in full upon the next paycheck, and it is why many people call payday loans paycheck advancements. Not only are quick guaranteed payday loans relatively safe for lenders, they can actually be highly profitable, and present a much more significant financial risk to the borrower, who may be subject to unfair fees and penalties in the event of default.

Who Can Be Approved for Quick Guaranteed Payday Loans
As the phrase “quick guaranteed” implies, just about anyone that has proof of steady employment, is over the age of 18, and a has checking account can be approved for this type of loan. During the approval process you may need to provide check stubs or some form of proof of payment from your current employer to show that you will be able to repay the loan upon receiving your next paycheck. Lenders require applicants to have checking accounts because it increases their chances of being repaid via direct deposit. In some cases, the lender will debit the borrower’s checking account for the amount of the payday loan, and the bank will honor the payment even if the account balance is slightly insufficient to repay the loan, causing the borrower to incur overdraft fees. Furthermore, many lenders also require the borrower to sign a contract which contains a clause that states the lender can contact their employer as a reference to determine the applicant’s financial reliability.

What Happens If You Do Not Repay Quick Guaranteed Payday Loans with Your Next Check?
Unfortunately, when borrowers fail to repay quick guaranteed payday loans they often are forced to repay the remaining balance with some of the most exuberant interest rates in the industry applied. In fact, over time the amount of interest accrued on the payday loan can equal as much as 50% of the original loan amount! Lenders use such exuberant interest rate penalties to motivate high risk borrowers into repaying the loan, thereby minimizing the risk of taking losses due to loan defaults. Thus, if you’re considering a payday loan you’ll want to ensure that you will be able to repay the loan in full upon the agreed repayment date, otherwise you may be making seemingly unfair monthly repayments for many months to come. In fact, many quick guaranteed payday loans are subject to compounding interest, which means that even the interest applied to the loan balance accrues interest, along with the principal!