Getting in a financial rut is a common problem especially among the working class heroes. There are a few ways on how to get financial help and one of the most popular method is by taking up a payday loan. Many consumers are attracted to these type of financial source because the application process is simple and fast, unlike traditional loans. Many providers accept online applications and the borrower may even receive the cash within 24 to 48 hours. Payday loans may be quite useful especially during a financial emergency but borrowers must ensure that they know the real deal about the loan.
Here are a few important things that every borrower must learn about payday loans:
Getting a payday loan is relatively fast and easy and can indeed be a lifesaver during emergencies. However, the downside to this type of loan is its exorbitant interest rates which can be between 24%-39% of the loan amount.
Shorter pay terms
The borrower must make sure that they will be able to pay for the loan amount plus fees on their next payday. This can cause major problems especially if the borrower has other bills to take care of.
Apart from paying the loan amount plus interest fee; other fees included are administrative fees as well as paperwork fees. Although most states already have existing laws relating to the fees, lenders are still able to charge the borrowers as many fees as the interest rate.
Cycle of loans
The salary loan solution can easily turn into a vicious cycle where some borrowers may find it hard to break free. Borrowers can be stuck in the cycle especially if they are not able to pay their loan at the right time.
So before you take out a payday loan or any type of loan for that matter, assess your financial situation first. Ask yourself if getting a payday loan is really the final solution. Do not take a loan if you are just going to buy a new phone or that new designer bag. Keep in mind that it is never fun paying any kind of debt, especially payday loans where you may have to work a few more overtime hours just to pay off the loan.
In case you are indeed experiencing serious financial woes, then you first have to find other options wherein you will not have to worry about high-interest rates. Exhaust all other viable options so you can get to the best solution for your financial problem. If you must take up a salary loan, then it is best to look for a reliable lender with lesser interest rates and fees. Use the power of the Internet in finding the most suitable lender that can help you without draining your bank account in the process.