Payday Loans
At one point or another everyone of has encountered this situation, not having
enough money to make it to our next payday. A common solution to this
problem that seems to becoming more popular is a payday loan. While a
payday loan may be fast and convenient, it may not be the best solution.
A payday loan company offers to loan you money based upon repaying it
and a service fee on your next payday. This often seems like a perfect
solution until you look closer.
There is a simple reason as to why we are seeing more payday loan companies
opening up and advertising so much. Payday loans are very profitable for
those doing the lending due to the high interest rates and often end up
being almost addictive for those borrowing the money. A recent national
survey of payday loan companies found that only 37% of companies accurately
reflected their interest rate. At most places the interest rates varied
from 390% to 851% annually with the average being 474%. Payday loans are
generally meant to be paid off on the next payday. Payday lenders loan
out thousands of dollars every week to people who are in dire need of
money.
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Payday Loan Information
Payday lending is often regarded as something predatory and it is of the common belief that payday customers are being used as fodder by the money hungry payday lenders. However, the various researches undertaken throughout the years contradict the view that payday loans are predatory and the borrower is always being preyed upon. In fact, recent studies have shown borrowers preferring payday loans to other loan alternatives.
If you are pre-approved, they will usually ask for some kind of income verification. Some online payday loan companies require you to fax them a pay stub and/or a bank statement. They sometimes want to verify that you have a valid phone number and email address. There are other companies who are “faxless” who help you get the loan processed without you having to fax in any verification. These loans usually verify income by telephone. Once you have completed the companies quick verification process, you will usually receive a direct deposit into your bank account the next business day. Most online payday loan companies will deposit the money into your account within 24 hours.
A cash advance loan provides you with emergency cash when you need it most... usually between paydays! Normally there is very little paperwork involved. Just complete a short Cash Advance payday loan application. Once approved you can usually receive the cash on the next business day! Some companies offer even faster service.
It important to keep in mind that this is a short-term loan! The minimum required Cash Advance payday loan payment is typically due within 7 to 14 days. The same way they wired the money directly to your bank account... would usually be how your payment will be made. The company will let you know the exact amount, and the exact date they will do the bank withdrawal. You will know all of this BEFORE you agree to the Cash Advance payday loan. As that day gets near and you know you may not have all of the payment... contact the company. Most customers have options that will allow for a refinanced, or restructure of the pay period.
Typically if you receive a $100 Cash Advance payday loan… 7 to 14 days later you will be required to pay back about $125. That may not sound so bad, especially if you really needed that $100 at the time, and know you can easily pay it back plus the extra $25 when you get paid from your job. But if compared to maybe a 6% interest rate from a bank, or even a high 29% if taking a cash advance from a credit card... using the same repayment period, this Cash Advance payday loan would equate to somewhere near 500% So consider… If you are strictly comparing interest rates to interest rates, there is no question that the A.P.R. on payday loans are outrageous!
But also consider this… will a bank or credit union loan you a quick $100 when you really need it? How about that same day, or within 24 hours? If you have some credit issues… will a bank or credit union even talk to you at all? Even if you have A1 credit, and are in a situation where you needed a little quick extra cash it is very unlikely you can walk into any bank and get it within 24 hours. The one exception would be if you already had a pre-establish line of credit with your own bank. The bottom line is that Cash Advance Payday Loans exist for a reason.
Cash Advance payday loans are designed for emergency situations! When you are short on cash and need money fast! Family emergencies, unexpected car repairs, overdrafts, telephone reconnection, the rent is due, etc. Some companies post their fees right on their websites. With other companies the actual fees for the particular amount you request are determined based on the information you provide when you submit your Cash Advance payday loan application. You ALWAYS will have an opportunity to not accept it. You are NEVER obligated to accept a cash advance just because you submitted an online application.
Once you have applied online, many companies will follow up with a contact by phone to verify your information and explain the terms to you. The key is how quickly can your information be verified! Most companies can wire the money directly to your bank account within 24 hours. There are some Cash Advance payday loan companies that say they can do it in even less time.