The Payday Loan Definition And Terms You Must Know

If you are in need of a short-term loan, a payday loan may be the loan for you. If you’re not sure what a payday loan is, then you might be hesitant about requesting one. Before entering into any financial commitment, it is important to understand how it works, so having a basic understanding of a payday loan definition may help to determine whether or not this loan option is for you.

You will also want to familiarize yourself with a couple of other must-know terms along with the payday loan definition. The following terms and definitions will help you understand and prepare for a payday loan. 

Payday Loan Definition  

If a payday loan interests you, then the very first thing to know is the payday loan definition. 

A payday loan is an unsecured, short-term loan. It is often made out for a small lump sum of money and provides quick cash to those who need a financial bridge between paychecks.

A payday loan was named based on the nature of the loan. Borrowers seek out a payday loan as a type of advancement for their upcoming paycheck. As such, a lender will determine the loan amount you qualify for based on how much you get paid.

Other Loan Terminology And Definitions

Now that you know the payday loan definition, you can familiarize yourself with the following terms. These terms will inevitably come up during a payday loan application. Having a full understanding of them will help you understand the basics of a payday loan.

Short-Term Loan

A short-term loan is a loan that does not take years or even several months to pay back, such as a mortgage or vehicle loan. The duration of a short-term loan can last for as little as a few days depending on the situation.

A payday loan acts as an advancement on your next paycheck, so the loan duration is brief, and will typically end by your next payday. This could be as much as a few weeks or as little as a few days depending on when you apply and when you receive your next paycheck.

Unsecured Loan

An unsecured loan is a loan that does not require a borrower to put up collateral.

A payday loan is exactly that, where borrowers do not have to use any assets to secure the loan. Even if you have a poor credit score, you will never need to provide collateral to qualify for this type of loan.

Proof Of Income

One term and condition you will come across with a payday loan is proof of income. Proof of income is documentation stating how much you get paid, how often, and who your employer is.

Proof Of Pay Determines Qualification

With a payday loan, providing your lender with proof of income is detrimental to the application process. Based on how much you make and how often, your proof of payment will provide information that will help determine whether you qualify for a payday loan and how much.

What Is Considered Proof Of Income?

 This will depend on your source of income, as well as what a lender will accept as proof. 

The most common proof of income is a pay stub. Anyone who is employed will receive a paper or digital copy of their pay stub every payday. 

If your income comes from a different source, such as self-employment, social security payments, alimony payments, and the like, you will need to find out acceptable forms of proof. You can do this by contacting a payday loan representative about your specific source of income. 

 

Get Help From Carolina Payday Loans, Inc. 

With the help of a Carolina Payday Loans, Inc. representative, you can find out other need-to-know payday loan terms and conditions. Contacting a representative is as easy as submitting a quick cash online form, or giving their nearest store location a call. 

Once you have a representative on the phone, they will ensure you understand everything about the payday loan process and the required documentation needed. While on the phone, you can also ask them any questions you may have.

Get Quick Cash

Carolina Payday Loans, Inc. can get you quick cash. With amounts from $100 to $500 in payday loans, you are never far from the money you need. Once all of your questions are answered, just bring the required documents to one of our many locations.

When you arrive, a representative will determine if you qualify for a loan and inform you of how much you can receive. If you accept the offer, you can see your money as soon as the same day you apply or the following business day. 

Apply Today For A Payday Loan

With the knowledge of a payday loan definition and what it entails, you can start the loan process without hesitation. With Carolina Payday Loans, Inc., the entire process can take as little as 30 minutes. Simply submit a quick cash online form now to get started.

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.