Even Beginners Can Get Payday Loans
They are a type of loan that given to you in advance of your next payday
, which need to be paid back with interest when you get your next paycheck. Either online or in a store, you are approved and given money within a few short hours.
The requirements to receive a payday loan are quite simple. Your name, address, employment status and bank details are given to the lender. Most often, the lenders that provide these advance loans do not perform a credit check.
There are several online lenders that provide an advance up to $1500 instantly. These loans have all kind of different names, cash advance, or post-dated, check loans.
The borrower can write a post-dated check that can be cashed in on payday and pay back the loan immediately, or approve a post dated draft to their account for repayment.
You might have heard negative media about payday loans and their fees. Yes, when compared to a traditional loan with a normal APR, the interest rate seems quite high.
However, these are not traditional loans, they are short term. Meaning the APR can't really translate well in a matter of two weeks or so. The fee usually is $10-$15 for every $100 borrowed for a two week loan.
If you are a person who gets paid once a month, you can ask your lender if you can have a loan for a longer term, or if they offer another type of loan that will fit you better.
Any delays in repayment of the loan can result in charges for late fees and rollovers. There are pro's and con's to payday loans. These loans are being marketed through radio, television, direct mailing and the Internet.
A payday loan is the fastest and easiest if you suddenly need cash for medical expenses or unforeseen emergencies. Financial crunches can cause all kinds of stress and a payday loan can help you pay immediately pending bills so that your credit report remains unblemished.
The process is very simple and fast. As mentioned above, all you need is some basic information to apply. There is usually no credit check when applying for a payday loan.
So even those with poor credit can rest assured that they will most likely be approved. There are some disadvantages of these kinds of loans as well. They are only for small amounts, so if a person needs more money, they should look at getting a more traditional loan.
If you extend your loan past the typical 14 day period, you may end up paying a lot more for every $100 you borrow. They are not recommended for long term or large amounts because of this fact.
Long term credit rates are more affordable, so the downside to payday loans is if you need a larger amount, you may need to go through the longer application process through a bank. Payday loans are quick though, but if your needs are bigger, then you may want to rethink a payday fast cash loan.
Depending on the lender, your terms and conditions may be unclear and you may end up paying finance charges twice, or three times, more than if you specified that you want the whole loan amount deducted from your bank account on payday.
Some companies will only deduct a small percentage to keep you in debt and charge you more fees. Communicate with your lender and make sure you understand, clearly, what the terms and conditions are.
Make sure you have the money to pay the loan back within the specified terms of your contract.
It is true that many people default on their loans.
But most of those cases ends up showing that the borrower is the one responsible for the delinquency, not the lender. The entire reason this industry was created was for people who need cash advances, not just normal loans to buy big ticket items.
You must know that you have the amount to pay it back by your next payday. Avoid rollovers as much as possible as they can be an easy trap to fall into. Borrow responsibly and all will be well.
by: Jack Landry
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