Things you need to know about payday loans in India.

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Payday loan is gaining importance in India day by day. As we all know, it refers to borrowing money which is to be paid back on the next salary day. It normally comes with high interest rates and is given on the basis of your income for the short duration of time. In last couple of years, there is significant increase in people using this option to fulfill their urgent money needs. These loans are mainly provided by private financiers that can also be called as non-banking finance institutes. These companies perform the functions which a bank does, but do not fit in the definition of bank.

Factors involved in growth of payday loan sector-

The factor which is responsible for significant growth in this sector is the change in borrowing habit of the working people in India. People run out of the money at the end of the month. The main reason behind this is several expenses in store even before the salary is credited in the accounts. This serves as an opportunity for the financial institutions that provide loans for short period of time which is to be repaid on next salary day. Most of the people have started using this option as the reliable source for solving their money problem at month end. Demonetization has also played a key role in growth of this sector.
Another reason for the popularity if payday loan in India is the people’s desire to get instant money for fulfilling their requirements in this fast and challenging life. Traditional financiers like banks have long approval process and hence they are not useful in the emergency situations. The amount taken as the payday is very less which a bank does not provide as loan but a private financier does.
The loan approval process is very quick and simple. Additionally, there is no credit check. You just need to submit a copy of pays lip and recent bank account statements. So, this type of loan is suitable for those having bad credit history.

Process of applying payday loan in India

In order to apply payday loan in India, you need to furnish certain documents as listed below:

Proof of income
Age proof
Proof of bank account
Pan card details
Mobile number

The application can also be done by filling an online form. The amount sanctioned as loan is based on your income mentioned on your income proof i.e. salary slip. This verification is done in order to make sure if the applicant is able to repay the amount or not as there is nothing kept as security against the loan. Once they are satisfied with the details you have furnished, the loan is approved and amount is transferred in your account.

Things to consider before applying for payday loan

When you think of taking a payday loan, approach an institution which grants quick loans on 24 X 7.
See if their approval procedure is instant and most probably online.
There should be no hidden fees.
Interests shouldn’t be very high.
They must have flexible repayment terms.
They should be protective about your data.

This is all about the payday loan. Hopefully, this information will be useful for you in future if you think about taking this loan.