Thursday, 17. April 2014
Payday loans can assist you if you’re in a tight spot financially. But as helpful as they can be, they can also become financially dangerous. This will give you the right information about payday loans.
Many times people find themselves in a position where they have no other choice than to take out a payday loan. It’s important to make sure that you have no other options before taking out a loan, though. If you have friends or family that you may borrow money from, ask them before applying for a loan.
Beware of falling into a trap with payday loans. In theory, you would pay the loan back in one to two weeks, then move on with your life. In reality, however, many people cannot afford to pay off the loan, and the balance keeps rolling over to their next paycheck, accumulating huge amounts of interest through the process. In this case, some people get into the position where they can never afford to pay off the loan.
Do your research to get the lowest interest rate. There are traditional payday loan businesses located around the city and some online too. Gaining your business is their goal, which means they focus on price. Some lenders also offer a significant discount for first time borrowers. Prior to committing to a lender, be sure you know what choices you have.
If you are considering taking out a payday loan to repay a different line of credit, stop and think about it. It may end up costing you substantially more to use this method over just paying late-payment fees on the line of credit. You will be stuck with finance charges, application fees and other fees that are associated. Think long and hard if it is worth it.
If you are looking for the cheapest payday loan, look for a loan that is direct from the lender and not an indirect loan from a lender who lends someone else’s money. Indirect loans have really horrible fees that are impossible to pay back, they do this so they can make money.
Never accept a loan that is less than completely transparent in its terms regarding interest, fees and due dates. Any company that will not disclose this information up front is possibly a scam and you could end up with hidden fees and charges you had no idea about.
When you find a good payday loan company, stick with them. Make it your goal to build a track record of successful loans, and repayments. By doing this, you may become eligible for bigger loans in the future with this company. They may be more willing to work with you, in times of real struggle.
Only take out a payday loan, if you have no other options. Payday loan providers generally charge borrowers extortionate interest rates, and administration fees. Therefore, you should explore other methods of acquiring quick cash before, resorting to a payday loan. You could, for example, borrow some money from friends, or family.
Whenever you apply for a payday loan, make sure you have your most-recent pay stub to prove that you are employed. You should also have your latest bank statement to prove that you have a current open checking account. While not always required, it will make the process of getting a loan much easier.
Read all the fine print on anything you read, sign, or might sign at a payday lender. Ask questions about anything you do not understand. Assess the confidence of the answers given by the employees. Some simply go through the motions all day, and were trained by someone doing the same. They might not know all the fine print themselves. Never hesitate to call their toll-free customer service number, from inside the store to connect to someone with answers.
Whenever you are applying for a payday loan, you should never hesitate to ask questions. If you are confused about something, in particular, it is your responsibility to ask for clarification. This will help you understand the terms and conditions of your loans so that you won’t get any unwanted surprises.
If you have a decent credit score, apply for a low fee payday loan. This type of loan usually has lower interest rates, and no hidden fees. The lender will need to check your credit report. This should not take more than 24 hours and should be your best option, if your credit score is not too low.
Whenever you apply for a payday loan, try and find a lender that requires you to pay the loan back yourself. This is better than one that automatically, deducts the amount directly from your checking account. This will prevent you from accidentally over-drafting on your account, which would result in even more fees.
Prior to actually acquiring a pay loan, be sure the money you are borrowing is really necessary. Financial emergencies are the only times to consider payday loans as a solution. Payday loans must not be used as a reason not to plan financially.
Do not sign anything until you read the contract carefully. Read the terms of the loan and ask any questions you may have. If you discover fees you were not told about or clauses you just can’t understand, take your business to another payday lender.
Do not extend your payday loan unless you absolutely have to. The interest rate is so high on a payday loan that it can be very difficult to pay the loan off if you extend it beyond the first pay date. Payday loans are short term loans and should be treated as such.
Some lenders don’t require you to have credit. However, you may find that you have been denied a line of credit because of bad credit. No credit isn’t the same as having bad credit. Before you sign up for a payday loan, consider how your credit will impact your application.
A unwise payday loan can garner you quick cash with costly repayment terms and make your financial situation worse in the long run. Utilize the knowledge you’ve just learned in order to make the best decisions on payday loans.