What Is A Payday Loan
A payday loan is one for someone who is in need of some emergency cash
. There are many reasons one can need some cash for a short time and many of these include car issues, medical bills or another one time expense. It is important, however, to remember to only use a payday loan for a real emergency and not just to buy those cute shoes that are on sale. This will help keep you out of debt and reduce the temptation to not pay off the loan when it comes due or not have the funds to do so.
Payday loansare very easy to get in most states. According to data from 2006, there are 25,000 payday loan centers in the United States. Payday loans can be found at payday loan stores, check cashers and even at pawn shops. Even some rent-to-own stores will grant payday loans. Other loan sites can be located on the Internet. These loan centers carry an annual loan volume of $28 billion. In addition, they also receive almost $5 in loan fees paid by borrowers. These numbers continue to climb. According to industry analysts, the annual loan volume in 2009 was approximately $30 billion with almost $5 billion collected in fees.
If you are looking to take out a payday loan, the general amount is anywhere from $100 to $1,000 depending on state legal maximums. These loans are only meant to help consumers out until they get to their next payday. Therefore, the loans typically come due with a short amount of time. These are good tools for those who dont have any other financial options available to them. However, it is advisable to pay the loan back as soon as possible. This is because payday loans are priced at a fixed fee. If a consumer fails to pay back the loan promptly, then the fees can skyrocket and it can be very costly to get out of the payday loan cycle.
Getting a payday loan is a fairly easy process. Borrowers do not have to have good credit in order to be approved. With the economy being slow to recover, payday loans are being distributed to people from many different classes and backgrounds including military members, blue collar workers and those who have found themselves falling temporarily behind on bills. Generally, all an applicant needs is a checking account and the ability to prove a steady income in order to pay the loan back. Most loans dont require a credit check and can be approved in a matter of minutes. The borrower will then write a post dated check which will be held until the payday loan comes due. On that date, the lender will cash the check or in some instances, the amount will be deducted electronically from the bank account.
When looking to take out a
Payday loans, shop around for a trusted lender. Also, look for a lender who offers the best terms and the lowest rates. Be sure to only borrow as much as is needed and an amount which can be paid back with certainty by the next pay period. When that paycheck comes in, the first priority of the consumer should be to pay back the loan immediately.
by: loanlady groo
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