Payday loans

There come those dark days when you cannot wait for your salary to be paid to cater to one need or the other. Such requirements may arise as emergencies or unexpected expenditures. Payday loans would come handy on such days. With a payday loan, you can effectively utilize the money for whatever it is you intend to use it for, without having any worries about your "yet to be paid" salary.

This kind of loan is quite different from the other types, and their volume may be determined by your salary volume (in most cases) and the level of risk involved. The repayment of the loan is based on a monthly deduction of a specified amount (which includes the monthly interest) from your monthly salary.

Payday loans are usually short term, and their interest rates may be a bit (relatively) higher than some other type of loans. Yet, a payday loan is the type of loans fit for those people who do not like to take the risk for long term loans. With a payday loan, they pay banks from their next salary, and their mind is off it.

General Requirements for payday loans

The requirements for obtaining a payday loan from online money lenders differ based on whether it is an individual loan or a corporate loan.

For individuals:

• Bank Verification Number (BVN)
• Passport photograph
• Address
• Salary account, pension account or tax ID
• Employment letter

For SMEs/Business:

• A copy of passport photograph
• A means of identification (driver's license, international passport, national passport)
• Last six-month bank statement of account
• Certificate of incorporation
• Memorandum of association
• Post-dated NUBAN cheques from the client
• A suitable guarantor (employment letter, undated NUBAN cheque, staff ID, guarantor form)

Pros of payday loans

• Very easy to get: there are many reliable sources of a payday loan available online, with easy accessibility and loan procurement, as their system is automated.
• Convenience: as it can be readily processed online, without you taking any form of geographical displacement.
• No need for collateral (in most cases): you do not have to put your expensive possessions at stake to get a payday loan.
• The higher your income, the more you can borrow.

Cons of payday loans

• As the name implies, it is for salary earners
• It may not be able to solve substantial financial problems
• Interest rates are relatively higher

Before using any of the payday loan platforms, read through their terms and conditions thoroughly and take note of all necessary details, especially the loan tenure and the interest rate.