Is A Payday Loan For You?
Payday loans are known as short term instant loans
. They are cash advances that are to be paid back, with interest, on your next payday.
Payday loans are quite easy to obtain, but the ease should not fool you into thinking that they are any less serious than a traditional loan. One borrowing money from a payday lender should determine if they are able to pay it back within a few weeks.
Otherwise, this loan could get out of hand very quickly. And one must also determine if they truly need a payday loan.
Some of the recommended reasons for obtaining a loan such as this include: medical bills, auto repairs, school tuition and supplies, or bills due before your paycheck so you can avoid late fees. The need must be urgent, though lenders don't require you disclose a reason for getting a loan.
Within just a few minutes of applying online, loan approval is determined and if accepted, cash is given within a couple of hours. All that is required to attain a payday loan is your name, address and bank details.
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 types of loans are also known as 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.
To get his instant cash, the charge for every USD 100 is around $15-$20 for a 14 day loan only. Any delays in repayment of the loan can result in charges for late fees and rollovers.
There are advantages and disadvantages of payday loans; it merely depends on what your needs are and if a payday loan is the right choice for you. These loans are being marketed through radio, television, direct mailing and the internet.
Benefits of Payday Loans
- A payday loan is the fastest and easiest choice 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.
Disadvantages of Payday Loans
- These loans are only for small amounts. As the interest rates are high for long term, the industry keeps you from going into serious debt by only allowing small loans at a time.
- 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.
Some people get into the payday loan cycle and end up getting themselves into more trouble than they were to begin with. 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.
by: Ignacio Lopez
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