Single-payment loans, more commonly known as payday loans, are loans that require you to pay them back in one lump sum in your next payday.
While there is no exact definition of a single-payment loan, they are typically short-term loans that usually offer $500 or even lesser.
You can see these loans marketed in such a way that help you bridge the gap with unexpected expenses that are out of your budget.
That said, single-payment loans or payday loans are a source of short-term financing.
Typically, single-payment loans are easy to get approved, and you can get the money as soon as the next few hours.
Thus, they are the most accessible type of loan in the market and one of the most popular, albeit with their bad reputation.
How a Single-Payment Loan Works
A single-payment loan, more commonly known as a payday loan, is technically advanced against your next pay.
You would give the lender proof of income and the intended amount you want to borrow.
They would then give you the amount that is expected to be paid with the principal, along with interest.
The repayment period depends on how often you get paid, whether monthly, bi-weekly, or weekly.
Additionally, you also need bank account information to be able to apply.
This is because the money you’ll borrow will be directly deposited in your bank account for instant access.
Sometimes, some lenders require a post-dated check for the payment, along with the fees for processing.
However, some states require that the check be dated the day the borrower receives the money, which the lender will hold until the repayment period ends.
Once the repayment period ends, you will be required to pay the principal amount, interest rate, and processing fees.
If you cannot pay up in full, you can ask the lender to extend your repayment period or roll the remaining balance into a new account, albeit with another processing fee.
If you default on the loan, the consequences will amount to the same as defaulting on a credit card.
However, there are cases where lenders can sue the borrower with check fraud.
Also, you will still suffer credit score damage.
Flexible Repayment Terms
Single-payment loans are flexible, which means you can adjust the repayment period however you want.
As mentioned before, single-payment loans are a source of short-term financing that matures very quickly in two weeks or a month, depending on how you want it.
However, online lenders sometimes offer single-payment loans that can last up to three months.
But, if you opt for a shorter repayment period, the interest rate can increase.
Before you apply, it’s best to gauge when you can pay the loan entirely.
Not only that, but you can also work out something with your lender by discussing your repayment terms.
You can ask the lender if they can offer you co-signed loans with a low interest, which has a high chance of happening if you have a good credit score.
Excellent Way to Finance Unexpected Expenses
Emergencies can happen anytime, and if it’s a financial emergency, you can’t wait for weeks for a loan to get approved.
Since single-payment loans are very accessible and fast, they are the most viable option in terms of emergencies.
When we say fast, it means that you can apply now and probably get your money a few hours later tops, or the next two days at a maximum, which is beneficial, unlike other loans that usually get approved two weeks after you apply.
Simple Application
One of the best things that single-payment loans can offer is that many online lenders have single-payment loan products, which you can choose from.
Not only that, because you can apply online, you won’t have to go to a lender’s office, which takes time and effort to do.
Online single-payment loans have a smooth application process and only need a few documentations to get approved.
If you found a trusted online lender, they typically have an online application form that only needs a few minutes to fill.
Just input the necessary information, input the amount you want to borrow, and send it to their website.
Not only that, you can apply anytime on their website.
Unlike banks, you don’t have to worry about their office closing since online lenders are operational 24/7.
It means you can also apply during the weekends and the holidays.
Takeaway
Because of single-payment loans’ accessibility and speed, it’s no wonder why they are the most popular type of loan in the market.
Not only that, but they also have a flexible repayment term, and you can usually negotiate with your lender.
Even though some have a poor reputation, there are still online lenders with good reviews that you can count on.
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