Payday loans can be a real lifesaver. If you are considering applying for this type of loan to see you through a financial pinch, there may be a few things you need to consider. Keep reading for some helpful advice and insight into the possibilities offered by payday loans.
If you take out a payday loan, make sure that you can afford to pay it back within one to two weeks. Payday loans should be used only in emergencies, when you truly have no other alternatives. When you take out a payday loan, and cannot pay it back right away, two things happen. First, you have to pay a fee to keep re-extending your loan until you can pay it off. Second, you keep getting charged more and more interest.
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.
Be sure to do good research when seeking a payday loan. Chances are, you are facing an emergency and are running out of both time and money. However, taking the time to find the best loan can really save you a lot in the long run. This will help you figure out what you are getting into so you can have confidence in your decision.
Make sure you select your payday loan carefully. You should consider how long you are given to pay back the loan and what the interest rates are like before choosing your payday loan. See what your best options are and then make your selection in order to save money.
If you’re going to get a payday loan, you must be aware of the company’s policies. Many payday lenders won’t give you a loan unless you have been employed with the same company for no less than 6 months. They need to be sure you’re reliable and can pay back the money.
If you are in the military, you have some added protections not offered to regular borrowers. Federal law mandates that, the interest rate for payday loans cannot exceed 36% annually. This is still pretty steep, but it does cap the fees. You should check for other assistance first, though, if you are in the military. There are a number of military aid societies willing to offer assistance to military personnel.
Always read all the terms and conditions involved in a payday loan. Identify every point of interest rate, what every possible fee is and how much each one is. You want an emergency bridge loan to get you from your current circumstances back to on your feet, but it is easy for these situations to snowball over several paychecks.
The most important tip when taking out a payday loan is to only borrow what you can pay back. Interest rates with payday loans are crazy high, and if you take out more than you can re-pay by the due date, you will be paying a great deal in interest fees.
Those applying for a payday loan would be wise to do their research before filling out an application. Most quick loans are not the same and some have better terms. Compare payback policies and interest rates prior to applying to a particular company and choose the best one.
Do not allow a lender to talk you into using a new loan to pay off the balance of your previous debt. You will get stuck paying the fees on not just the first loan, but the second as well. They can quickly talk you into doing this time and time again until you pay them more than five times what you had initially borrowed in just fees.
Always read the fine print for a payday loan. Some companies charge fees or a penalty if you pay the loan back early. Others charge a fee if you have to roll the loan over to your next pay period. These are the most common, but they may charge other hidden fees or even increase the interest rate if you do not pay on time.
You need to be aware that if the interest rate of a typical payday loan were expressed in terms of APR, it would be 651.79%. This differs between states, but the average nationally is that rate. Interest rates can be hidden in the contract. Sometimes you must read through the fine print to find this information.
If you are thinking about a payday loan, consider taking a cash advance on your credit card instead. Even if the interest on your credit card is high over 25% it is still cheaper than the interest rate on payday loan. With a fee of 15% on a two-week loan, which is pretty typical, the annual interest rate tops 400%.
On average, the typical payday loan amount varies between $100, and $1500. It may not seem like a lot of money to many consumers, but this amount must be repaid in very little time. Usually, the payment becomes due within 14, to 30 days following the application for funds. This could end up running you broke, if you are not careful.
While payday loans generally are used in emergencies, they may also be useful for money management issues. The extra money can help you budget your cash. From that perspective, you can still come out ahead even with the larger repayment amount. Just be sure to use common sense.
Hopefully, you have found the information you needed to reach a decision regarding a possible payday loan. Everyone needs a little help sometime and no matter what the source; you need to be an educated consumer before making a commitment. Consider the advice you have just read and all options carefully.
