The Ultimate Guide To Payday Loans: Here Is Everything You Need To Know
Uh oh, you spent a bit too much this month. You winded up in hospital. Your cat needs its yearly injections. Whatever the reason, you are reading this because you are in need of some quick-cash to help you out of a bind.
And you decided that payday loans was the way to go.
But do you know what you are getting yourself into?
Payday loans are an excellent option for a short-term loan to help you out of a jam. But the last thing you want is to have it bite you later on. Which is why it is important to know exactly how these loans work inside and out before you take one out in your name.
The good news is that is exactly what we are planning to explain in this article. From how they work, to payment schedules, and expectations. From interest rates to tips when taking out your payday loan – we will go through absolutely everything you need to know.
So, let’s get into it:
Payday Loans Simplified For First-Timers
Let’s say for some reason your money is inaccessible. Whether its late payments or an unexpected expense that burned a hole in your wallet. Now you need a quick fix of temporary cash to help you get through the month.
That’s exactly what payday loans are for.
These are short-term investments, that act almost as an early payday. That means that these loans tend to be anywhere between two-week to month loans. Of course, if you find yourself struggling near the end of the month, you can always request an extension on the loan.
What’s the catch?
When you request an extension on a payday loan, your fees will keep accumulating, which can quickly tie the shackles of financial debt to your wallet. Which is why we strongly recommend you plan out your spending habits before signing up.
Why Would You Want To Bother With A Payday Loan?
The great thing about these loans is that they technically count as “no credit check” loans.
Meaning your credit record could be at an all-time low, and it won’t affect your chances of being accepted or rejected.
Which is why they can be both a blessing and a curse for people in financial debt. Something, we are hoping to keep you out of.
How Much Should You Expect To Pay On A Payday Loan?
We’re not going to lie to you. Although these loans may be an excellent choice for a quick fix – they can be incredibly expensive. Especially if you opt for a rollover (extension) on the loan.
The actual interest rates vary between vendors. But typically you can expect anything between 426% APR on a loan.
What does this mean?
Let’s say you decided to borrow $1000 for 2-weeks. At the end of this tender, your interest will accumulate until the final amount is around $1200-$1400. Of course, finding the right vendor to help you out can significantly reduce the interest that you pay on your payday loan.
If You Are Looking To Rely On Payday Loans For A Long-Term Strategy – Don’t!
The subheading says it all. If you are struggling to stay afloat in the midst of financial debt, STAY CLEAR of payday loans! Due to the excessive interest rates on these loans, it will only make things worse.
In fact, you should only consider taking out payday loans once or twice in your life. They are designed to help those in need that can afford the crazy high rollover rates. After all, it’s all about risk assessment for vendors.
Are These Loans Safe?
There is a lot of contradiction in the financial world about payday loans. On the one hand, we have advocates claiming it is the best fix for a quick flux of cash. While others adamantly refute this claiming, it is the most dangerous loan an individual can take out.
At the end of the day, it all depends on the borrower. Do you have the cash at the end of the tender to afford double the loan you took out? If so, then, by all means, go ahead. If you have even a slight doubt behind your ability to pay the loan back immediately – search for another option to help you out of a fix.
Well – What Else Can You Consider?
If you are really in a tight jam, just because payday loans are easier to get it does not mean it’s your only option. You can also look into taking out an unsecured loan, which is also known as a personal loan. Not only are the interest rates lower, but you can be sure it’s safer for your financial well-being.
In order to keep yourself far away from this situation, we do recommend opening up a savings account or keeping a blank credit card locked away for emergencies. After all, you only want to worry about paying off the crazy loan interest rates once or twice in a lifetime.