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The Beginner’s Guide To Payday Loan Terms And Definitions

If you’re new to short-term loans, there are a lot of payday loan terms and vocabulary that can get confusing. Taking out a loan should not be done under trivial circumstances, but payday loans could be effective short-term solutions for those facing a financial emergency. If this is your case, you’re in the right place.

We’re diving into all you need to know about payday loans, from what they are to who should get one and the fastest way to see if you're eligible. We’ll cover:

  • The definition of payday loan
  • The most common payday loan terms
  • Applying for a payday loan
  • And more

Important Payday Loan Terms & Definitions

What Is A Payday Loan?

Payday loans are small emergency loans given over a short time. Normally, payday loans are paid back during your next pay period – hence, the name – but these terms can change depending on your needs and source of income.

Payday loans differ from title loans because they don’t require collateral. This means you don’t have to pledge any of your assets to get approved for the loan. So long as you have income, the contract and your signature are enough to guarantee the loan’s repayment.

Payday loans also differ from installment loans because they are usually paid back in one lump sum on a predetermined date. In contrast, installment loans are paid back in monthly payments over a longer period.

Terms To Know

You’ll surely run into these eight payday loan terms when looking into this financial option, so let’s break them down so they’re easy to understand.

Proof Of Income

Payday loans require the borrower to have proof of income. This is usually a paystub from their latest W2 paycheck, whether a hard copy or a printed digital one.

At Tennessee Title Loans, Inc., we can also work with those with alternative sources of income, such as Social Security, a pension, alimony, or another source. However, you’ll still need to provide proof of income, usually through a legal or government letter.

Active Account

Another requirement to apply for a payday loan is an active checking account in your legal name. This name should match the one on your driver's license or state I.D. An active account means you have used it at least once a month over the past few months or longer.

Secured vs. Non-Secured Loan

Secured loans require collateral, whereas unsecured loans do not. Payday loans from Tennessee Title Loans, Inc. are unsecured, so you can apply without the need to offer your car, home, or other assets as collateral.

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Document Verification

When you apply for any type of loan, you’ll have to go through a document verification period. This is when a lender reviews your paperwork – such as your I.D., bank account, and proof of income – to ensure everything is in order.

This process could take days or even weeks at traditional lenders, but at Tennessee Title Loans, Inc., our verification process could take as little as 30 minutes.

“Qualify” For A Loan

Qualifying for a loan means you’re eligible to apply for said loan. At Tennessee Title Loans, Inc., you can qualify for a payday loan without good credit or collateral. You’ll only need the following to qualify:

  1. Driver's License or State-Issued I.D.
  2. Your most recent paystub
  3. A blank check from a checking account in your name

These documents will help decide your loan amount.

Approval Process

This procedure is when a lender reviews your application and determines whether or not you will receive the loan. We’ve made this process much faster and combined it with our document verification phase.

Loan Representative

A loan representative is a trusted professional from Tennessee Title Loans, Inc. As you apply for your loan, this person will be your point of contact.

Inquiry Form

The inquiry form for Tennessee Title Loans, Inc. loans can be found on our homepage. Completing it is the first step to applying for your payday loan.

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How To Apply For A Payday Loan

Now that you’ve learned the top payday loan terms, it’s time to apply. Complete the inquiry form and wait for a call from our loan representative. They’ll walk you through the application process and arrange to meet for the document verification procedure.

Once everything is approved, you could qualify for up to $400, which will be sent to your account that same day or the following business day.

Become a Pro – Get Your First Payday Loan Today

You’ve surpassed the beginner’s guide to the definition of payday loan and payday loan terms, and now it’s time to upgrade to being a payday loan pro. By getting started today, you could receive the urgent cash you need by today or tomorrow.

If you have any questions, our loan representatives are here to help. We want to ensure you’re comfortable with payday loans before deciding if it’s the right financial solution for you. Don’t wait – join the team of pros and contact us today.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Mason Roberts

Mason Roberts is a seasoned economics writer and blogger with a knack for breaking down and simply communicating the ever-changing world of finance. He is philosophically committed to the premise that financial knowledge equals financial freedom.