How Much Do You Actually Know About Payday Loans
Payday loan is a much hyped way to borrow money. If you need cash aid and you are thinking of applying for a payday loan then you should consider other alternatives. Even if there are various benefits, a payday loan can get you into debt and affect your credit rating if you do not pay back on time. A payday loan is certainly not the solution if you need money to pay for rent, mortgage, household bills, or repay old debts. In this article we will further discuss about what actually payday loan is and the importance of reading the fine prints of the loan ahead of signing the agreement. Other common terms for this kind of credit include cash advance loans, check advance loans, post-dated check loans and so on.
Generally, a payday loan is a short term loan meant to bridge the cash gap between two paychecks. They are high interest loans against which you can borrow $1000 or less for a term not more than one month. The amount is small as well as the term. Borrowers will have to give the lender either access to their checking account or write a check in advance for the full balance so that lender can get the cash when it is due. Interest rates are exorbitantly high and can cost you as much as 400%.
Whether you are applying for a Payday Loans Online or from a lender's store, the process is almost same. You need to submit personal as well as financial information, request a loan for the amount of cash you are in need of, pay a fee and receive the cash right into your bank account. There are several factors that lender will consider to determine how much cash you can borrow and for how long. Though your credit score may be overlooked, lenders are going to measure your ability to repay back the loan.
Payday loan is an expensive solution. Depending on the state you reside, the amount of cash offered, the loan term as well as the fee will vary. Usually, $10 to $15 is charged for per $100 borrowed. A typical payday loan can have an annual percentage rate (APR) of up to 400%. These loans are ideal whenever you are in need of some extra money to deal with small unplanned needs such as car repair, medical charges and so on. If by the end of the term, you are unable to repay it back in full, you will be charged extra fee.
Every year, millions of Americans apply for payday loans. Anyone who has a checking account and steady income can opt for a payday loan. This is one of the most common solutions for those who do not have access to credit cards or have credit problems.
If you can assure timely repayment, payday loans have several benefits. If you do not have any other financial options, this loan is a good tool for fast and easy borrowing cash during an emergency. They are ideal for anyone who does not have savings or credit cards available. As you do not have to go through traditional credit checks, people with financial problems can also easily obtain this loan.
It is absolutely important that you repay back the borrowed loan when it is due. Most borrowers get into difficulty with payday loans when they do not repay the debt on time. You can contact the lender if you are unable to repay the loan, but you will be charged with additional fee for such services. Failure to repay on time can get you stuck in a cycle of payday loans, which can lead you to huge financial problems.
Depending on which state you reside the law that regulates the lending industry may vary. All laws are designed to define the allowed lending terms and rates. The lenders generally work around such laws and banks. Therefore, it is extremely important that you read the fine prints mentioned on the loan agreement.
Before you consider getting a payday loan, there are several options that you can consider. Ask yourself if it is really an emergency and if a payday loan is the only viable solution available. If you still need to apply for it, be sure you understand all the terms and cost. Compare and shop around for a trusted lender and borrow only as much as you need and can afford to repay easily with your next paycheck.