The term overnight loan is usually
used to refer to a payday loan. Payday loans are loans that don't use
traditional collateral but are instead guaranteed by your next paycheck. You
can typically borrow up to $2,000 (depending on your income) and have to pay
the loan off in full on your next payday. You will turn over to the lender your
bank account information and they will automatically debit your checking
account for the loan amount plus fees on your next payday. Because they can be
obtained very quickly, payday loans are often referred to as overnight loans.
You can apply for a payday loan today and in most cases you can have the money
in your checking account the next day.
Qualifying for an Overnight Loan
Are payday loans hard to get? The simple answer to that question is no, they are not hard to get. If you have a job with verifiable income and a checking account you can get a payday loan as long as your income meets the lender's requirements. Because payday loans are secured by your next paycheck they do not require the lender to look at your credit report. This can be beneficial for a consumer that has bad credit and needs to get emergency cash immediately.
Are payday loans hard to get? The simple answer to that question is no, they are not hard to get. If you have a job with verifiable income and a checking account you can get a payday loan as long as your income meets the lender's requirements. Because payday loans are secured by your next paycheck they do not require the lender to look at your credit report. This can be beneficial for a consumer that has bad credit and needs to get emergency cash immediately.
Payday loans are easy to get but
they are an expensive way to borrow money. Payday lenders do not usually attach
an APR to their loans as is the case with traditional loans like auto loans and
mortgage loans. Instead, they collect a flat fee based on the amount you borrow
- a typical example would be a fee of $15 for every $100 borrowed. Payday loans
usually go up to a maximum amount borrowed of $2,000. In the case of a $2,000
loan you would pay the lender approximately $300 in fees. When you consider the
fact that this loan has to be paid off on your next payday (2-4 weeks from now)
you can see that this is a very expensive way to borrow money for a very short
period of time.
Payday loans do have their place and
if used responsibly they can help get you out of a serious financial jam. The
biggest danger of payday loans is when they are not paid off in full but
instead rolled into another loan. Let's say you take out a $500 payday loan but
when your next payday comes around you don't have enough to payback the loan in
full. Your lender may give you the option of taking out another loan and
rolling the old one into it. This gives you a few more weeks to come up with
the money but you now owe fees on the new loan as well. This process can
quickly snowball into a situation where you get buried under a mountain of new
loans and fees. Payday loans should only be used to bridge a short term
hardship (in other words a situation that will be fixed by money coming in very
soon). Payday loans should never be used to try and fix an ongoing situation
where your bills consistently exceed your income.
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