Payday Loans, A Viable Option?

Written by admin on March 28th, 2011

What are pay day loans?

Payday loans are short term loans extended payment days between the two. Payday loan is normally 14 days. As a check on the borrower’s credit terms agreed security against loan lender is my favorite. To date, the credit for the lender to recover the dues check deposits. On the next payment due date is usually the borrower in the day. Payday loan no credit checks are being made to give. For this reason, the borrower is not a FICO score. This doesn’t have bad credit history credit important ‘ or there are any credit history, or declared bankruptcy.

Qualifications for pay day loans

Get a payday loan, the borrower must meet all these requirements. There are no exceptions.

o you must be a u.s. citizen.

You must to at least o 18-year-old.

o, a full-time job you just must be here for at least three months.

o you must either have an active checking account or savings account.

o your after-tax salary must be at least $ 1,000 or you must have a fixed income of 0.

The cost of payday loans

Payday loans carry a very high cost. $ 100 Payday loan lenders usually charge anywhere from $ 15-$ 25. It must be borne in mind that this fee is 14 days as a loan, the same prolongs this only for several days. If you take into account the cost of each year, the percentage rate of charge (APR), the average is 391%, which after all standards are excessive. By law, is mandatory for the lender to the borrower to specify the GPL. Many lenders to compare the cost of payday loans from other forms of financing; but this comparison is the common denominator is all of them are very expensive.

When to make use of payday loans?

Payday loans should be received only in the event of an emergency. In light of the fact that the cost of payday loans out is very high, the resource should be as a last resort. If it fills good budgeting methods, and have a good financial plan can minimize the cost of payday loans on the basis of the need for the loan. In addition, you’ll need to make sure that payday loans are paid in due time. Payday loans should be rolled over or extended period of time you will find the borrower is not itself a debt trap if the money might be simply to repay the loan.

Profiles from a borrower loan payday

o is a typical payday loan customer between 25 and 40 years with an annual income of anywhere between $ 25,000 and $ 50,000.

about us census report for the year 2000, the results of the payday loan borrower survey are:

22% of respondents hold a bachelor’s degree.

51% of those surveyed have retirement savings plan.

In more than two-thirds of those surveyed have a savings account.

More than two thirds of those surveyed had annual income of at least $ 25555.

Why payday loans are popular?

They are popular for those reasons, for example:

o credit checks are not required. Personal check you make payable to the lender acts as collateral.

an approval is fast. If all the necessary documents are submitted, the application may loan approved in minutes.

paperwork involved is straightforward. In general one or two documents would be sufficient that explains the process of loan and your obligations.

o is the reimbursement process without hassles. Cheque as security is being made on the next payday of the lender. You could extend the loan to the subsequent paydays for a fee. However, this is very expensive.

O easy availability. Payday loans are especially appropriate in situations of emergency and provided the required sum is a small one is ready to bear the high cost of the loan.

Payday loans in viable option when you need cash and need it fast. However, you will need to be careful who you work with your loan. If you don ‘ t need  money straight away, you will probably have a better solution.

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