The amount of money a payday loan company will allow you to borrow will vary depending on the loan company you are using and the state in which the payday loan company does business.
How the Loan is Calculated
Each payday loan company has its own minimum loan amount (usually $100 to $500) and its own maximum loan amount (usually $1,000 to $1,500). In addition, each borrower will have his or her own maximum loan amount as set by the payday loan company.
In general, the maximum loan amount is calculated based on the borrower’s salary. A good rule of thumb many payday lenders use to calculate a borrower’s maximum loan amount is to simply figure out the borrower’s net pay for each payday. Because payday loans are typically very short term and must be repaid at the time of the borrower’s next payday, it only makes sense that a borrower will not be allowed to borrow more than he or she can realistically pay off in two weeks or less.
It is also important to remember that payday lenders have limits regarding your ability to take out a payday loan. In particular, most payday loan companies will require that you earn a minimum amount each month – that figure is generally $1,000.
In addition, the amount that a payday lender will let you borrow may change as you take out loans and repay them on time. For example, a payday lender may first approve you to borrow $500. Then, on the successful repayment of that loan, the payday loan company may then raise your approval amount to $750. In other words, most payday lenders acknowledge a borrower’s responsible behavior.
How Much Should I Borrow from a Payday Loan Company?
• First of all, borrow only what you need. If this amount is $500, and you are approved to borrow up to $1,000, simply borrow only the money needed – not the entire $1,000. Many borrowers find the lure of quick cash to be very tempting, but it is important to resist the urge to take more than you need, as this can only spell trouble when it comes time to repay the payday loan.
• Second, borrow only what you can afford to pay back. Otherwise, you will find yourself in a situation where you need to roll over the loan and incur additional expenses and fees. The process of rolling over a cash advance loan is dangerous for many borrowers, as it often results in mounting fees that become just too high to pay off in a reasonable amount of time.
Most payday lenders require that you meet certain requirements before you can borrow money. Some of the requirements include age (you must be at least 18), employment status (you must be a full-time employee), bank account status (you must have an active checking or savings account) and proof of income.
If you are considering borrowing money from a payday lender, remember to only borrow what you need and what you can afford to pay back.
Learn more about how a
payday advance can help you through any financial difficulty. Take advantage of PayDayOne’s
guaranteed payday advance rates to affordably and quickly obtain the funds you need before your next pay check arrives.
