The statement that a payday loan is your sheet anchor when you badly need cash is very questionable. Payday loans, undoubtedly, have their advantages. But there are some shortcomings to this type of loans. Personally I try to stay away from this kind of lending services. But let’s count all merits and downsides to payday loans in order to form an objective opinion on this credit product.
In fact, payday loans are cash advances. When you get stuck between your pay days without cash in your wallet, you badly need some money from an outside source. Plus if you face some unexpected expenses, you have poor credit, and credit cards are no option for you, a payday loan is what can help you to get through till you receive your next paycheck.
Dealing with such a loan is just like dealing with any other loan. You borrow a certain amount of money with a commitment to pay it back at the agreed rate and fee.
Payday Loans Costs
Different lenders issue loans at various rates and fees. And this issue is a sore point of payday loans. You will generally pay from $ 15 to $ 30 for obtaining $ 100. As for interest you will have to pay, it is really drop-dead enormous. The rates range between 390% and 780%. And this is the worst part about payday loans. Now let’s move on to the more pleasant ones.
Applying for a Payday Loan
The payday loans application process is simple. You can do it on the Web, or go to a loan office. You fill out an application and provide some personal information for a lender to make a loan decision. The requirements are generally the same: you have to be at least 18 or older, must have a steady job with a minimum monthly income of $ 1,000, and a checking account. You will, probably, be asked to provide your social security number, copies of bank accounts and pay stubs. If you meet all these requirements, you can be sure that you will be approved for a loan. Then you usually have to wait for 24 hours (or less in some cases) and you will have the access to your money.
Payday Loans Highs and Lows
Payday loans are a way out for cash-strapped people. If you really need to get some cash and you need it fast, taking a payday loan is better than robbing a bank. Another good thing about such loans is that getting one you do not expose yourself to a long-term commitment, like when dealing with a traditional bank (when you get a mortgage, a car loan, or a reward credit card. You are to pay back the money borrowed after you get your next paycheck. As a rule, the cap on the maximum amount of money you can borrow is $ 2,500. So, this is another pro of such loans. You won’t burry yourself in huge debts. And payday loans turn out to be less expensive as compared to bounced checks.
So, if you find a pile of bills to pay one day and no cash or credit line available to do it, think of getting a payday loan. It can be a good backup plan for you. But be responsible about paying it off promptly, otherwise, you will face hefty fines and might get the sticky end of the stick. Remember about payday loans only in some cases of emergency, not when you feel like buying a new designer’s suit or jewelry.