Many a times in life we come across a situation that needs us to make some urgent arrangements for cash. It might be the medical bill that needs to be paid urgently or a great offer that you simply cannot afford to miss out on. In such a situation, payday loans are an easy and great way to get some instant cash. What Are Payday Loans? Payday loans are small amounts of cash that range from anywhere from $100 to $1000. This loan amount has to be paid back on the next payday. They are also called as cash advance loans.
Now payday loans are becoming very popular across the country as they do not have many of the hassles that are common with other forms of loans. The main reason for the popularity of payday loans is the convenience of the whole process. Requirements There are hardly any tedious processes and requirements for you to get the payday loans. All that you need is a checking account with a bank in America and proof of employment.
You will then be eligible to get the payday loan approved. Now there are many online payday loan companies that instantly approve the payday loans and you can even get the cash credited into your account on the same day. A few simple questions is all that is asked by the companies. They might also require you to fax certain documents in some cases, but still the entire process does not take more than a day to complete. No other loan process is as fast as payday loans.
Repayment Usually most payday loan companies require you to give them a post dated check which will be deposited on your next payday. Some payday loan companies can also arrange for the money to be directly taken out of your account on the next payday. So you won't even come to know that you have paid it off. So you have up to 30 days to repay the amount. If you cannot pay the money on this payday, then you can get up to a couple of extensions as well.
However, this service involves a separate charge. Downside The high interest rates or the APR is one major drawback of payday loans. The entire term of payday loans is synonymous with emergency cash.
You should only opt for payday loans if you need some fast cash urgently and you have no other resource to turn to. This is because you will be charged approximately $25 on every $100 that you borrow. So if you borrow $1000, you owe the company $1250 on the next payday. You may not even receive the full $1000 in the first case. The lender deducts financial charges before giving you the money. If you roll over your loan to the next payday, the charges mount further and can actually get out of control.
So it is extremely important that you know all the pros and cons of payday loans before you sign up for a service of this sort. Seeking counseling from a financial consultant will give you a better idea about these loans. What you are looking at is a short term solution for some urgent requirement of cash. You definitely do not want it to become a long term never ending problem for you. So, the bottom line is that you should only opt for payday loans as a last refuge.
Pay it off on your first payday itself and you shouldn't have any trouble with the service.
Payday Loans are being used more and more, unfortunately as a long term financial tool.
