Payday loan lenders do not provide more than one loan at any given time. Neither this is in the best interest of the borrower nor of the lender. A payday loan is a short term loan, designed to facilitate a short cash boost rather than a deep financial need.
Which borrower has to repay by next payday. It is an instant cash loan and money is paid directly into your bank account. And Borrower has to repay a loan in full with interest and charges at the end of the month. Most
Payday loans are legal short term loans. Payday advance loans online are considered as a convenient option when you are strapped for cash before your next payday. But sometimes, life brings surprises for us like new financial crises come to you.
Rather paying a first payday loan in time, you may face a shortage of cash and planning to apply for another to meet expenses or to pay the first payday loan. But, there are a few things you need to know before you apply for multiple payday loans.
Major Reasons; Why Should You Stick to One Loan at a Time?
Sometime people manage to get multiple payday loans online from different lenders at the same time. And it is really unadvised as it may drag you into a debt trap due to high costs. Here are some reasons that you should stick to this principle, “one loan at a time”.
Multiple Loans Make Life Unmanageable
When a person has more than one credit card, then it becomes very difficult to manage them. Then the final scenario will be very disastrous, as it will become difficult to pay interest and other charges in time. So it is better to look for other options to manage financial needs despite of pursuing for multiple loans.
Do Not Take Payday Loan as a Long Term Financial Solution
It is a short term loan to fix your small needs. It is suitable as long as you can surely afford the repayments. But it is not recommended to take payday loans for a longer duration.
If it is so, then better to go for other more suitable credit types available out there. Having a good credit is plus sign for availing instantly but even if you have bad credit, you can try contacting monthly instalment loan for bad credit direct lenders
Assess your Affordability before Applying for Multiple Payday Loans
It is suggested that always assess your requirements as well as your affordability before applying for a payday loan. If you know that you will need time to payoff loan then it is better to look for alternative sources with better rate and time to repay loan.
Can A Person Take Out Multiple Short-Term Loans?
Payday loans are legal short-term loans. States of America have independent lending laws. If you are applying for multiple payday loans then you may have to meet more strict criteria than when you applied for first time for payday loan. Because, a second short-term loan is more of a risk for the lender, and at the same time a financial burden to the borrower.
Criterion for a Second or Multiple Payday Short-Term Loans
When you apply for second payday loan, then multiple payday loan lenders are at risk. So they want to ensure that either you will be able to repay the loan or not. To do this, they have more stringent criteria, which can include:
- Your credit history
- Your current loan status.
Lendermay check that what payments you make on your current loan?
- Your current employment
- Your current income
If you have lost your job and currently have a lot of debt obligations then it is very difficult for you to qualify for more than one payday loan.
Is There Any Way Of Guaranteed Second Short –Term Loan Approval?
When you need a second payday loan, keep in mind that there is no guarantee that your application for the second payday loan will be approved. Keep the following in mind before applying for another loan.
- Examine Eligibility criteria before applying for second payday Loan
Some lenders may notify you as not being eligible for multiple. They may specify that you cannot currently be repaying a short-term payday loan, so you cannot avail the second loan to pay the first.
- Check affordability and your budget
Before applying for second payday loan, think can you afford the repayments of the loan you are applying for? If you think that you will struggle hard and will manage. Then it is better to look for alternatives of payday online loan.
- Beware of Hidden charges and rollover fees
When you apply to refinance loan with the same lender, then you will owe the original amount you borrowed, fixed fees, higher interest rate, and service charges for the subsequent loan.
The Bottom Line
Thanks to technology that all information is available online. So do some research on available options to solve financial crisis. Compare interest rate, fees, other charges, eligibility criteria, and repayment schedule and find the right loan for you.