You see the ads on TV and on the internet, payday loans that offer fast cash no matter what your credit is. Fast cash is a pretty tempting offer, but is it right for you? What exactly is a payday loan and is it right for you?
What are payday loans?
Payday loans are unsecured loans that you can get without a credit check. They are short-term loans that you must pay back within thirty days or less; often you need to pay it back on your next payday. The requirements for a payday loan are usually just that you have a job, are over 18 and that you have a bank account. It is common for you to need to give a postdated check, posted for the date of your next payday, and written in the amount of the loan, plus the fees.
If you cannot pay the loan on the due date, you can extend the loan and you have to keep paying additional fees on it. The interest rate charged for payday loans is usually well above 100% and it is not uncommon to have to between $10-$20 per every hundred dollars that you borrow.
What are the dangers of a payday loan?
The dangers of a payday loan happen primarily if you borrow more than you know that you can pay back. Just because a payday loan company offers loans up to a certain amount does not mean that you should take out the full amount. Take out only what you absolutely need to borrow to get by on and nothing more and it will make it easier to pay the Online Payday Advances back on time.Do not try to use payday loans as a long-term solution to money problems. They are designed for those times when you find that something unexpected has happened and that you need money. Rolling over or extending your payday loans should only be done if you have no other choice.
What are the advantages of a payday loan?
Payday loans are very easy to qualify for and get; you need to have a job and usually, a bank account. When emergencies happen, if you are already on a tight budget, any unexpected bill can be catastrophic. Nobody should have to choose between paying for a bill and buying food. If you find yourself with sudden bills, a payday loan will help. Payday loans are designed for helping people get through those unexpected emergencies, so that you can have the peace of mind that you can cover the emergency expense, and still be able to live.
Needing a payday loan does not mean that you cannot manage your money. Far from it, it is a way for people who need extra help every now and then to get it. Payday loans are not long-term solutions because they need to be paid back quickly but when life throws you a curveball, payday loans will help see you through the bad times.
Payday loans do have high interest rates and fees, but when you compare them to what your bank charges you for bouncing a check, the fees are reasonable indeed. Instead of bouncing checks when you know that you cannot cover them, get a payday loan. Bounced checks will get you in trouble with your bank and with the company that you bounced the check to. Being on Chexsystem can impact your financial future. Banks will not open accounts for anybody who is currently listed in Chexsystem. The company you bounced the check to can also send your bill to collections, so now you have a negative item on your credit report.
Skip overdraft charges, bounced check fees, and the headache that comes with that. Chexsystem and bad credit takes years to get rid of. With a payday loan, you will get the money that you need, and it will be less than what your bank overdraft or bounced fees cost and no ding on your credit, as long as you pay it back.
If you do not have any room on your credit cards, or if your bank will not extend a line of credit to you, then a payday loan is often the best choice. Keep in mind that payday advances are designed to be short-term and that you need to pay them back within a short period of time.
You should always try to budget up through your next payday so that you can pay back your payday loan without rolling it over. If you are not careful with money, or if you doubt that you can pay back on time, you might not be suited for a payday loan. If you understand how the fees work and can pay it back, then a payday loan is a viable solution for your money needs.
Another way to ensure that you can pay back your payday loan is to only borrow the bare minimum that you need. This keeps the costs down and it helps you be able to pay it back when the loan payment is due. The more you borrow, the harder it will be to pay it back when it is time.
Life never runs smoothly, so when you find yourself facing the unexpected burden of a sudden bill or repair cost consider getting a payday loan. Always shop around for the best terms before getting your payday loan. Finding the best interest rate is very important so always find out what the fees are and when you have to repay the loan by.