Posts Tagged ‘payday loan’

Your son broke his leg on the trampoline, you had several birthdays in the month to buy presents for, your car got a flat tire, your water heater went out or maybe you are so fed up with the 9-5 that you need to get out of town for the weekend. Whatever the reason, you might have a need to get cash quickly to take care of something urgent.

A payday loan could be a answer but, similar to any loan, they should not be availed until you have researched if it is the best option for you. Payday loans have received some very bad press and there are many critics out there that tout that these loans are predatory and do not help the general population.

They have been accused of preying on low income people to only trap them into debt. The truth is that most payday loan borrowers are of middle class and middle age.

The main complaint from people who fight against the payday loan industry is the interest rates of these loans. Yes, they are high when compared to traditional annual percentage rates.

But there is one word in there that doesn’t really apply – annual. These loans are not for annual terms.

They last no longer than a few weeks, at most, and were not created to drag on for months or years. So the interest rate that a person pays for a short term loan end up being worth it when they need cash fast and easily.

A payday loan is a small, short-term loan for urgent and emergent situations. Lenders typically lend anywhere from $100 to $1500 and it is paid back when you get your next paycheck.

You can either write a post dated check or approve a post dated withdrawal from your bank account on the day you have chosen to pay the loan back. The application process is very easy and quick.

You must be 18 years of age or older, have valid picture I.D., consistent income of at least $1000 a month (this can be alimony, child support or government benefits, as long as it is consistent), and a bank account.

The money is usually availed to you within the next day, if not a few hours, for you to use however you wish. The lender does not even need to know why you need the loan in the first place.

Every lender can be different in regards to what they offer and expect, so you should be clear when picking a lender what their fees are, etc. Most lenders offer about the same kinds of loans and their requirements are probably pretty similar, but it is wise to be clear from the outset.

One thing you want to make sure of is if they have an extension clause. This would mean that if you could not pay your loan back on the day you agreed to on your contract, that you can extend the loan for an amount of time to take more time to pay it back.

Most lenders offer this but they do so with more fees applied to your loan balance. Find out what they are before your sign your contract so you are clear if you ever need to take advantage of it.

The next thing you need to make sure of is if they charge you an early repayment fee. If you pay your loan back within a few days before it is due to be paid, some lenders like to tack on a fee for that.

Find a lender who does not, they will do this out of courtesy to their customers. They should always list their interest rates and fees clearly, where their customers can see them.

By law, they cannot be sneaky in hiding this information. You can find a lender however you are most comfortable but if you prefer to do it over the Internet, make sure you do your research.

Look for a physical address for their headquarters, that their fees are clearly displayed, that they are fair in their rates and payback terms, and that they have some good customer reviews. This way, you can find a great lender to work with.