Payday Loans – What You Need to Know About this Type of Loan?
PayDay Loans are loans which are due when the borrower gets his or her pay in the following month. It’s quite easy to apply for this type of loan. Anyone is able to apply for this loan as the lenders don’t check your credit history before giving you the loan. If you have a low credit score and are unable to apply for other type of loans, PayDay Loans are available to you.
Benefits of Payday Loans
It takes only less than a day before your application is approved while other loans take several days or even weeks. If you need money to face the unexpected and emergent situations, including medical bills, legal fees and so on, this type of loans is just for you. What comes first is to remember the terms and conditions of payday loans.
There’re only two main requirements for payday loans. You have to get a steady job and a bank account. A steady job is required to ensure the lenders that you are able to pay back the money on time. A bank account is required because the money will be transferred to the account.
As long as your payday loans application is approved and you receive money in your account, you should pay back the loan which will be due on your next payday. You’d better pay before the deadline but can’t exceed this date. Whether you can get extended deadline smoothly depends on your lender. Even though your lender allows you to extend the deadline, your interest will probably keep accumulating. It’s advisable that you pay back payday loans before the deadline.
Compared with other loans, payday loans can only offer a relatively low amount, which ranges from $250 to $1,000. A PayDay Loan is simply a small sum, short-term loan. But the amount which should be repaid on the borrower’s next pay day, usually depends on the lender, the location and the income of the borrower.
Limits of Payday Loans
Although payday loans are convenient, they’re not the right solution for everyone. Before you apply for a payday loan, you should also see its limits or disadvantages and rethink it.
One of the major problems you must take into consideration is the expense. If you need $200, you have to write at least $230 on the check, therefore, the additional part of money can offset the fees of the PayDay Loans. Lenders will charge fee ranging from 15% to 50% of the amount of loan, which is based on the length of loan term. Fees seem low at first but will swell into a large amount in several months. The APR will reach up from 300% to 600%. If you are a new borrower, you will be charged with a high interest rate. If you pay back the loan fast, your interest rate will be automatically lowered when you change your loan.
PayDay Loans are typically used only in urgent situations. Actually as long as you can pay it back on time, you can borrow money at any time because of easy application and preferred conditions in the beginning. But if you are unable to make use of this loan intelligently, people will be drowned in the sea of debt resulting from payday loan.
What to look out when applying for payday loans?
We all have times when we need short term financial assistance to make ends meet between paychecks. Compared to borrowing from our friends or relatives, payday loans sound to be a better choice for most of us, since we understand that it will become embarrassing once we fail to repay the money when the lender needs it.
However, getting quick payday loans is not as easy as it used to be, because some states have prohibited payday lending in recent years. That means it’s now a crime to obtain payday loans in NC if the lender is a North Carolina resident. Besides, local companies that offering this type of loans are also considered illegal.
As a result, you must make sure you’ve completely understand the laws in your state regarding payday loans before you set out to submit your application.
Hopefully, the following tips can be useful for you
I. Utah is one of the few states that make payday lending legal. So, if you are living in this state, payday loans are still great solutions to meet your short term financial needs. But notice that payday loans Utah might come with really high interest rate, as the state government gives a great deal of liberty for lenders to practice their business and establish their own origination fees.
II. Sometimes, payday loan is not the only option you have. There are also lots of banks or financial institutions trying providing small amount quick cash loans to meet your needs. For instance, a number of companies regulated by the Arizona Department of Financial Institutions begin to offer fast-approved cash loans after payday loans Arizona are forbidden.
III. Even in states where payday lending is considered illegal, you may also find a few payday lenders. Don’t be freaked out. They are legal lenders as long as they have got special licenses and no longer charge extremely expensive interest costs.
When you apply for payday loans in PA, remember to pay close attention to the annual interest rate. Under the state laws, the interest rate shouldn’t be more than 24%. And the extra charge must be lower than 20% for the first $300. For amount exceeding $300, fees shouldn’t be more than 7.5%.
IV. Besides laws regarding the maximum loan amount you can borrow and whether interest rate is capped, you also need to talk to your loan broker to see what factors are required to be included in your loan contract. It’s also essential to figure out if payday loan is renewable and is there any limitation on multiple loans.
You may have such experience: you need small amount of money to solve emergency situations occurring in your life but there is no money in your bank account. In this case, there are many solutions offered to you. You can get cash advance from your credit card or apply for loans from lenders.
When you can’t make ends meet and your next pay day is far away from you, you will have to make use of financial means to solve your problems. You may think of PayDay Loan. But not all the borrowers know them well before they make application.
When people choose PayDay Loans in hurry due to lack of cash, they usually ignore some details, which may bring them great trouble later one. Therefore, you should take deep considerations while you decide to apply for this loan. To choose a legitimate and reliable lender is a key step during the whole process of selecting PayDay Loans.
If you’re not that familiar with PayDay loan or just want to refresh your ideas on it, the article is just for you. PayDay Loans are short-term loans which will be due when the borrower gets his or her salary in the following month. It’s quite easy to apply for this type of loan.