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There’s Nothing Easy About Payday Loans

Payday Loans

” Instant cash Available”, No hassle loans, No credit check loans, Cash advance loans these are some of the names by which you can recognize the payday loans. You might come across the advertisements carrying slogans like ‘easy loans in a matter of hours’, ‘Take loans for any purpose’ Easy loans , easy repayments; on the various places like the newspaper, television or at other media channels, prompting you into making a decision related to the know-how of these loans. Who doesn’t want quick and easy access to funds? However, this is not simple and there has to be a lot more of considerations into the same before you sign across the dotted line.

Let us look at the various aspects of the payday loans from the queries which often cross our minds.

What Are Payday Loans?

Payday loans are short term loans which are easily available to you and require no credit checks and documentation. You need to provide a post dated check for the amount equivalent to your requirement or offer the ECS mandate to the lenders so as to directly debit your account on the designated date towards the repayment of the loan amount. The loans are generally offered for a short time period extending up to a few weeks.

What Are the Fees for Payday Loans?

There is a fee associated with the payday loans which generally symbolize the processing charges of the loans. The general charges are a percentage of the mount one borrows and is generally calculated for every $100 borrowed by an individual. In case of the rollover or the extension of the loans one may be required to pay an extra fee. The fee is not what the payday loans are known for. In fact what really bothers the customers is the interest rates on these loans which are astronomical to the range of 400 to 900%.

How Do Payday Loans Work?

Let’s take an example to understand how the payday loans work? Suppose you take a loan of $500 to be paid on your next payday. In such a scenario you will be required to offer a post dated check to the lender for an amount of $550 where $500 is the principal amount and the $50 accounts for the fee and the interest rate. The lender can present the check in the bank on the decided date or you may take back the cake by making a cash payment to the lender. In case you decide to go for the Electronic clearing system, you will have to clarify the bank with the lenders banking details for the debit of your account with $550 on the designated date.

If one has immediate cash requirement, What Are the Alternatives to Payday Loans?

Payday loans may look to be the most obvious choice in these situations but a little research may reveal some of the alternatives as suggested by the FTC and are worth considering before you get on the payday bandwagon:

Remember, there’s no looking back to what has been agreed upon at the time of taking the loans. Always try and negotiate the hardest at the time of taking the personal installment loans.Time your loan requirements towards the end of the month when the lenders are in a hurry to close their accounts and meet their targets. Negotiations can be a bit easier and you can win great deals during these times.

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