PayDay loans offer individuals short term financial assistance in their time of need. However, because PayDay loans are specifically designed to tide people over from one paycheck to the next, they are usually only given to the applicant for a period of two weeks. Two weeks is not the only time limit in existence for applicants, but this is one of the most common time periods that have been set up for applicants.
Since many people do not need more money after they take out a short term loan, they typically will not need to apply for more than one loan at a time. This may depend on how much money the individual takes out as their PayDay loan. If it is a low amount, the individual may need more money in order to get them to their next paycheck if they underestimated the amount of money they would need in their loan. Each lender will have their own mandates when it comes to PayDay loans, but for the most part there are a number of generalizations that will exist across the board. Approval of an application depends on a number of different factors. The primary piece of information that lenders need is proof of employment. This is often achieved by the loan applicant supplying the lender with their last paycheck stub. They will also need proof of identification, proof of residency and, in some cases, collateral.
Individuals can apply for loans as often as they would like. However, this does not mean that the individuals will automatically be approved for their loans. Some lenders do not allow people to take out more than one PayDay loan at a time. When a person pays back their PayDay loan, they can take out another loan if they want to. This is not always the case if a person is going to different PayDay lending industries for a loan. PayDay lenders do not check the credit or the existing debt of an individual. As a result, one PayDay lender will most likely not be aware of another lender that has already issued a person a short-term loan. By going to different lenders, individuals can borrow a good deal of money in a number of various loans, should they choose to do so.
Each lender will issue loans with varying repayment plans. Not all lenders will make a person pay back their loan before applying for a new one, but this is not always the case and the decision depends on the individual firm’s loan options. Some options will limit the individual to one loan from their individual establishment at a time, but there are a number of ways to get around this mandate. In this way, PayDay loans differ greatly from traditional loans, such as those issued by banks. Banks will typically limit the amount of money an individual can take out at a time because they keep track of the amount of money a person has in debt through their existing loans, which limits the amount of applications a person can submit to the establishment. PayDay loans are exempt from this practice, so it is much easier for an individual to take out additional loans without penalties.