Pros and Cons of Payday Loans
If you need money fast, then you might be considering a payday loan. Payday loans are a relatively new way to get quick cash and can be a saving grace for people who don't have any other means of getting the emergency funds they need. Let's say your car breaks down and you have no savings to pay for repairs. In this case, one of these loans could provide you with the money you need to get your car back on the road.
You may also hear these loans referred to as cash advance loans. There are many different establishments popping up all over the place, both online and at physical locations. One good thing about this type of loan is that there is no credit check. That means if you have bad credit, you can still get a loan even when a bank, credit union or other financial establishment refuses to give you one. There are some things that these companies normally check, however. Because they want to make sure you will be able to repay them, your income will probably be verified. You can provide check stubs, or have your employer write a letter stating how much you make each month.
Another thing these companies may need is a few references. You can often use friends and family members as references. Sometimes they call them before giving your loan, other times they only call if they are having trouble collecting payment and cannot reach you. Which brings us to one of the drawbacks of these loans -- paying them back!
Let's say you take out a loan that requires an initial $20 fee for every $100 borrowed. If you borrowed $500, you'd end up paying a total of $600 when your loan came due, usually in one week. But suppose you didn't have $600 in one week? You can often choose to renew the loan and pay the interest charges only. The thing is, the longer the loan remains unpaid, the higher the interest charges go. It's not uncommon for the annual percentage rate on one of these loans to go as high as 600 percent!
All in all, payday loans are helpful if you have no other way to obtain the cash you need. The smartest thing you can do if you decide to get one of these loans is to read all the fine print, understand all the fees you'll be liable for, and pay the loan back as quickly as you possibly can to avoid extravagant interest charges.
Copyright 2006 Jim Sterling - All Rights Reserved
Let's Get More Transparency in Payday Lending - American Banker
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WDEL 1150AM - Bill to regulate payday loans clears committee A bill to regulate and monitor payday loans in Delaware has cleared a Senate committee after barely surviving a vote in the state House... | ||
Payday-loans-australia.org Helps Consumers Decide Whether to Use a Payday Loan to Update Their Electronics Consumers should decide very carefully whether to get a payday loan to purchase new electronic gadgets or home appliances, asserts payday-loans-australia.org, an information portal about short-term cash solutions. With payday loans being so convenient and easy to get, consumers sometimes tend to overuse them for unnecessary purchases of electronic gadgets and thus put an additional strain on ... | ||
Bill to regulate payday loan industry in Delaware clears Senate committee - The Republic
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The Ins And Outs Of Payday Loans | Honest Reviews Online A good tip for those of you who often turn to payday loans is to set up a budget where you have an emergency fund in the amount of your usual payday loan. This way, when you need a little quick cash, you can borrow it from ... | ||
Payday Loans Company Speed Dosh Ltd Step Forward to Defend their Industry Amid Further Criticism With further criticism being levelled at the payday loans industry from MPs and the National press Speedy Dosh step forward to voice their opinions regarding unethical practice within the industry.(PRWEB UK) 16 May 2012 Planned amendments to the Financial Services Bill have once again placed payday loan companies in the spotlight. The amendments, which have been drawn up by Labour MP for ... | ||
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Broke 20-Somethings Are Living Off Payday Loans, Check Cashing . Respondents making more money used certain services at higher rates than those making less money, including payday loans and overdraft protection. Lack of financial literacy, mounting debt, poor credit and no savings all ... | ||
PaydayLoansOnline.Net Announces New Report on US Short-Term Loan Market - MarketWatch (press release)
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