Payday Loans – Quick Cash Until Payday
All about Payday Loans
If you are looking for a short-term payday loan, you might want to think if you will be able to repay the loan and the interest without it affecting your monthly expenses drastically. If you are positive about it, you can go ahead and get the loan that you want.
Why Short-term loans
Short term loans may not be the best option, but for cash-strapped consumers, a payday loan is the best way to get the money that they need till their next payday. Since the amount that is approved in payday loans are substantially small, they will not be the perfect way to meet your major demands or expenses. Your income source and your job status are two of important details that will be required from you when you are applying for payday loans. This is to ensure that you will be able to pay back the loan after the money is spent by you.
Payday Loan Finance charges and Fees
If you are unable to pay the loan partially, there will be finance charges as well as additional fees for the amount. Based on CFPB, for an amount of $100 borrowed, the finance charge could be within 10 to 30%. Though payday loans may look like the ideal option to help you get the cash when you do not have a good credit card score or have bank savings, they could also end up as a costly way to borrow. Moreover, the finance charges, as well as the high fees involved in these loans, will push you into a long cycle of debt in no time. But, if you think that you will not be able to cover the entire loan during your next pay check, this loan is not in your best interest.
Benefits of Payday Loans
- Payday loans can be used as a good tool to borrow cash easily and quickly when an emergency arises and you do not have any other option.
- If you do not have a savings or a credit card, payday loans are the best way to get a loan.
- If you are facing financial problems now or previously, payday loans do not require a traditional credit check and will be easier to get loan approval.
Disadvantages of Payday Loans
- Payday loans should be repaid on time to avoid falling into a debt cycle. Many people tend to fall prey to this when they are unable to repay the debt on time which will result in increasing the amount of money due to additional fees charged.
- If you get stuck in payday loan cycle, it will be very costly to come out of it and will lead to further financial problems.
- These loans are very expensive when compared with other loans with about 400% annual percentage rate (APR).
It is always best to make use of your credit card or dig into your savings account if possible and take the payday loan only as the last resort.
In order to regulate the lending industries, usury laws are practised in many counties. These laws define permissible lending rates and terms which can be set by the lending companies. The amount of money lent by the lender as well as the charge on the loan is also regulated by the usury laws. Before actually getting the loan, it is best to read and understand your rights before you get to sign the papers.
Here are some alternative methods that you can use to meet your financial need.
- Ask more time from your creditor.
- Apply for a traditional loan if time is not a constraint.
- Make use of the bank’s overdraft protections.
- Get an advance from your employer.
- Negotiate with the creditor a payment plan.
- If you have a savings account, borrow money against it.
Taking a payday loan is not an easy decision to make and when all other options fail, it will be handy. The loans are not only approved easily and quickly but your money will also be transferred into your account by the end of the day. This is one of the biggest advantages of getting the loan as you will not have to wait for a prolonged period of time. A good way to find a lender would be to search for fast payday loans near me and narrow down your search from there. You could also use online websites to directly apply for a loan and meet with lenders online.