3 Things You Should Know about payday loans

Payday Loans Exposed – 3 Things You Should Know

Payday loans, also known as paycheck loans or cash advances, are fast and easy ways to get extra cash between paydays. With a payday loan, you can have the cash you need without having to wait until your next payday. Instead, you can take out the cash right then and there. There is no credit check or background check with payday loans. In fact, there are no credit checks at all – simply a simple verification that you have a checking account and that you have a payroll stub that can be verified online.


Unfortunately, payday loans often come with high interest rates

Payday cash advances are easy to obtain, but the high fees and interest rates mean that they are not a great solution for small amounts of cash. Payday cash advances are typically expensive. Payday lenders usually charge an average of $10 for each $100 that you borrow.


For this reason, payday loans should only be used by borrowers

who can repay the full amount on the date that has been allotted? In most states, borrowers are required to repay part of the loan on the date that is allotted, but this can be tricky if the borrower has unexpected expenses, such as a car repair, unexpected travel, or medical bills. In this case, the borrower should consider using conventional credit cards, or electronic check payment systems, to pay off the payday loans. Electronic check systems work very quickly while providing the financial services that traditional check processing systems do.


Because payday loans are short-term loans

the lender will often charge a fee for late or missed payments. Because these fees are often steep, borrowers should consider carefully whether it is worth it to pay these fees when they might have saved money through other means. Payday lenders also commonly charge a “one-time” processing fee that is different from the ongoing processing fees. Because many borrowers fail to repay payday loans on time, these fees can add up to a large expense.


One other issue that some people may run into

is having to use their bank account to pay off their payday loans. If a borrower has bad credit, or if their bank account is frozen, they may find that it is impossible to access their bank account to pay off their payday loans. Payday lending institutions are not notorious for taking people’s money without asking questions, so borrowers should consider whether it would be better to just borrow from a traditional bank and wait to see how long they get accepted for a loan in a store. Some stores are more forthcoming about lending to people with bad credit, but others do not. If you do borrow from a store that does not accept your bank account, keep in mind that the interest rate charged on a payday loan is usually very high.


Payday lending institutions are fast financial services

that make it easy for borrowers to get a cash advance while avoiding unnecessary fees. However, borrowers should be careful about where they take out these fast financial services. Not all payday loan outlets are created equal. Before you sign up for any payday loans advance, you should carefully read the terms and conditions of the agreement, and you should be sure that you understand every term before signing on the dotted line.

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