While most people know that payday loans exist, they don't know the details of how they actually work. Although payday loans have high interest rates, they can be useful in emergency situations. The following article contains a lot of information about payday loans.
When you take out a payday loan, you might as well say goodbye to your next paycheck. All the money you borrow will have to be sufficient until two payment cycles have passed, because the next payday will be needed to repay the emergency loan. Failing to figure this out could mean another payday loan, starting a long-lasting debt cycle.
If you're thinking about getting a payday loan, make sure you have a plan to pay it off immediately. The loan company will offer to "help" you and extend your loan, if you can't pay it off immediately. This extension costs you a fee, plus additional interest, so it doesn't do anything positive for you. However, it earns the loan company a good profit.
Compile a list of every single debt you have when getting a payday loan. This includes medical bills, credit card bills, mortgage payments and more. With this list you can determine your monthly expenses. Compare them to your monthly income. This will help you make the best possible decision to pay off your debt.
Make sure your employment allows you to qualify for your payday loan. Typically, companies will only lend you money if you have been working consistently for three months and your income is stable. You will need to provide proof of your income when you apply for the loan.
Learn your lesson when getting a payday loan. You will find that payday loans are incredibly exasperating. They usually cost double the amount you were loaned once you finish paying it off. You can use these feelings to motivate yourself to open an emergency savings account and borrow from yourself next time!
Great advice for anyone looking to apply for a payday loan is to avoid giving your information to lender matching sites. Some payday loan sites match you with lenders by sharing your information. This can be quite risky and also lead to a lot of spam emails and unwanted calls.
Don't let a creditor convince you to use a new loan to pay off your previous debt balance. You'll be stuck paying fees not only on the first loan, but on the second as well. They can quickly convince you to do it over and over again until you're paying them more than five times what you originally borrowed in fees alone.
Try not to rely on payday loans to finance your lifestyle. Payday loans are expensive, so they should only be used in emergencies. Payday loans are simply designed to help you pay unexpected medical bills, rent payments, or grocery shopping, while you wait for your next monthly paycheck from your employer.
For those who have weighed all their options and decided they must use an emergency payday loan, be a wise consumer. Do some research and choose a payday lender that offers the lowest interest rates and fees. If possible, only borrow what you can afford to repay with your next paycheck.
Getting a payday loan is remarkably easy. Make sure you go to the lender with the most recent pay stubs and you should be able to get some money very quickly. If you don't have recent pay stubs, you will find that it will be much more difficult to get the loan and you may be denied.
Keep in mind that annual interest rates on payday loans are as high as 651%. Although it fluctuates in each state, the national average reaches such a high number. You may not see that high number in the documents, but it can happen. Read the fine print to find this information.
Think about what you are going to do before applying for a payday loan. Keep in mind that payday loans have average APRs ranging from 378 to 780%. If you were to borrow $500 dollars, it would cost you about $125 in interest. Is it really worth it?
Always choose a payday loan company that transfers your money electronically. When you need money fast, you don't want to have to wait for a check to arrive in the mail. Additionally, there is a slight risk that the check will bounce, so it is much better to transfer the funds directly to your bank account.
Consider how much it will cost you if you borrow money using a payday loan. There are times when you may need the money despite the cost of repayment. The price of payday loans can range from $100 to $1,500. Typically interest on a payday loan will cost you between $15-30 per $100 borrowed, if you pay off the loan in two weeks. Try paying it off with the next paycheck you receive, to avoid more interest charges.
Before you commit to a payday loan, make sure the potential company you're borrowing from is licensed by your state. In the United States, no matter what state the business is located in, it must be legally licensed. If they are not licensed, there is a good chance they are illegitimate.
Review the fees carefully before entering into a payday loan agreement. While the speed with which they can be arranged is one of the selling points of payday loans, you risk exposing yourself to debilitating fees if you don't check the fine print beforehand. Make sure you will be able to repay not only the debt, but also the additional fees at the end of the loan term.
If you have to pay for something right now and have no other way to borrow money, you can use a short-term loan from a company like Western Union. As long as you don't use them all the time, payday loans might work for you.