This type of loan is also known as a payday loan or cash advance loan and while they have been available for many years, advance payday loans have recently become more popular.
Today, the application process is fairly simple, with borrowers able to apply online and have the money hit their accounts within a matter of minutes.
In general, all you have to do is fill in an online form and let the lender know whether you are in employment, whether it is full time, part time or you are self employed and then you will be approved if you meet their criteria. You can be approved for this type of loan within seconds and usually, you won`t require an absolutely perfect credit score either.
To qualify for an advance payday loan you need to be at least 18 years old, have a valid bank account to which you can receive a direct debit, be employed and receive a regular salary and be a US, UK or Canada resident.
The most important thing when you are applying for an advance payday loan is to understand that this is not a long term borrowing solution. You will be expected to pay back the cash - up to £750 / $1000 - within a matter of weeks. If you don`t pay it back within this time it could cost you dearly as interest rates are high.
But advance payday loans are extremely useful in certain circumstances and when they are used correctly.
When is an advance payday loan a good idea?
If you find yourself experiencing temporary financial difficulties and you know you will have access to money in a few weeks time, an advance payday loan could be for you.
Due to the quick decisions and short application process, you can have access to cash much more quickly than with typical lenders offering bank loans. You can also borrow only the money you need, rather than being tempted by larger amounts - banks may only lend a minimum of £2,000 which encourages you to spend what you haven`t got.
So if you have a household emergency and require anything from boiler repairs to a new front door and you simply cannot wait for payday, a small loan could help you in the interim. Plus, because you can apply online they are far more convenient.
Online application means there is no paperwork to file or chase and there are no hefty delays in accessing your cash, as it is transferred with almost immediate effect. On top of that, it means you don`t have the inconvenience or extra cost of travelling to the local bank and waiting in a queue to see a bank manager.
If you are thinking about a payday loan and are concerned about the cost, calculators like those found at simplyfinance.co.uk can help you calculate it.