Payday Loans: Convenient Money or a High-priced Trap?
By Roger Overanout
Payday Loans: Convenient Money or a High-priced Trap?
Do you want cash now however your payday is a week away, are you
short of cash and require financial help? If so you have in all
likelihood heard of payday loans and may be wondering about using
this type of credit service. If you need quick cash a payday
loan, especially if applied for online, is a speedy and easy way
of obtaining emergency finance.
There is no credit verification when you request a payday loan so
even if you have a inadequate credit history you can still
qualify without any problems, and once you have demonstrated your
credibility with the loan company they will commonly permit you
to borrow a larger amounts than is usually possible to new
borrowers.
Whenever you apply for a payday loan during business hours you
can be accepted in a matter of minutes and have the cash lodged
into your bank account by the next business day at the very
latest.
Before you apply for a payday loan you had better know that they
are very expensive especially if you do not pay off the cash back
when it is due. Nonetheless some borrowers are not worried about
the expense, they only want to know can I afford to repay the
amount due next payday, if so just give me the money to get me
out of my immediate financial problem.
Payday loans are provided by finance organization, and are
occasionally also called cash advance loans, check in advance
loans or deferred deposit cheque loans. The routine to obtain a
payday loan is terribly easy, you write a cheque for the total
you want to borrow plus the lending companies charge. The lender
then provides you with the amount of your cheque, minus their fee
and does not present your cheque till your next payday.
On your next payday you have assorted alternatives: -
a. Let the lender to cash your cheque and clear the loan.
b. Extend the loan for a further period of up to 30 days,
this can commonly only be done twice.
c. Repay the loan in cash.
Payday loans offer short term credit at very expensive rates,
since there is no credit check, when you employ a payday loan you
will be charged either a percentage of the monetary amount
borrowed or a set fee based on how much you borrow. Average costs
are between $15-$50 for every $90 lent. Remember if you decide to
extend your loan you will have to pay the total fee again and
this rapidly becomes exceedingly expensive.
The truth in lending Act gives you the right to know the cost of
any lending you request for, therefore you must obtain the
following in writing
1. The annual percentage rate (APR), the cost of credit on a
yearly basis.
2. The dollar amount of the applicable interest.
This lets you see the true cost of the loan.
If at all possible it is always better to make sure your are not
using a Payday Loan, more available sources of cash are
A credit union loan.
A loan against your next paycheck from your employer.
A loan given by family or friends.
Even a cash advance on your credit card.
Asking your creditors to provide you more time to pay off.
If all else fails you require the cash and no other source is out
there and you decide to take a payday loan it is all important
that you pay it back on the due date and avoid additional high
charges.
Roger Overanout
About the Author
For further vital information and views about Payday Loans pay a visit to www.paydayloancenter.info
You may reproduce this article provided you maintain an active link back to www.paydayloancenter.info
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