Using Payday Loan Services Responsibly
Payday loans, also called cash advances, are high-interest, short-term loans usually at usury interest rates. They’re meant to be quick and normally simple to qualify for, especially if the applicant already has a paycheck to hold him over until his next check. That’s where the problems often start for people who need fast cash. They can’t just borrow the money because then it will be added to their other bills. Payday loans, in many ways, work much like credit cards. You can’t spend more than you really have, but it’s very easy to overspend, especially if you don’t have a stable source of income to fall back on.
This is where debt settlement can come in.
Debt settlement is when your creditors lower your monthly payments to the point where you can afford to pay them on a somewhat regular basis. This requires you to have a steady source of income that you regularly make enough money each month to cover your monthly obligations. If you don’t have one or don’t make enough money each month to cover your obligations, it will be much more difficult for you to pay back your payday loan without falling further into debt. That’s why you must meet certain requirements if you want to settle your payday loans rather than continue to make your payments late.
The requirements vary
from company to company, but most of them are standard. Most of these requirements require that borrowers be at least 18 years old, be currently employed and have a checking account in good standing. These three requirements alone are usually what prevent many applicants from even being considered for a payday loan, let alone qualifying for one. Another requirement, which may increase your chances of success, is that the applicants must not have filed any bankruptcy documents within the last three years. These types of filings significantly decrease your credit score. Applicants with bankruptcies left unchecked are nearly always denied.
The requirements for this type of loan
are typically not very strict, which is why they are popular among borrowers who can least afford conventional lending. Borrowers can borrow money for as little as a few hundred dollars up to several thousand dollars. Because there is no credit check, most payday loan companies provide flexibility in terms of repayment terms. Some companies require full repayment on the date that they received the funds, while others only require partial repayment. Borrowers can typically choose their repayment terms at any point up until the date that they will be due for their next payment.
Borrowers who have a poor credit rating
can use additional fees to their advantage. Payday Loan companies typically charge application and processing fees, as well as a one-time, non-refundable administrative fee that is based on the amount of money that you borrow. In addition, borrowers are charged interest rates on the amount of the loan that they borrow. These fees can be up to fifteen percent higher than the average interest rate charged by other payday lenders.
Payday Loans are an excellent way to get short-term financing
when a borrower needs it, but it should be used responsibly. Payday loans are not designed for long-term financial problems, so borrowers must be sure that they can repay their short-term loans on or before their next paycheck due date. For borrowers who can not repay their short-term loans on time, they may quickly find themselves in debt. If you decide to take out a payday loan, you must consider all of the factors mentioned above and understand all of your responsibilities before taking out the loan.