Interested in a Payday Cash Loan? Get the Facts Before you Commit
A payday cash loan can prove to be extremely helpful if you are finding yourself short of money or if you are facing an emergency of some sort that only money can solve. This type of loan has become widely available thanks to the widespread and everyday use of the Internet. There is no need to visit a bank or another type of lending institution in person with a payday cash loan as they can be applied for directly from the comfort of your own home by simply logging onto the world wide web and locating a lender.
People who make an abundance of money do not need to even consider taking out apayday cash loan and the same holds true for consumers who have sizable savings accounts. Rather, the average borrower is a person who tends to live from one paycheck to another and whom does not have much money in the bank to use for emergencies. More often than not, the typical borrower has a poor credit rating and has most likely been turned down when applying for a traditional loan offered at 'brick and mortar' bank. A payday cash loan can be used to help pay the mortgage, auto loan or any other type of bill you may have. In fact, most lenders do not even ask you what the money will be used for so you can spend the borrowed money in any way you see fit.
A payday cash loan can range in size from $100 to $1200, depending upon the particular state the loan is obtained in. The average term of the loan is about fourteen days and it typically cost 400% APR or more. The borrower is also charged a financing fee that averages at about $25. So, for a two week payday cash loan, the finance charges end up making the interest rates anywhere from 390 to 780% APR. If the loan is for a one week term, the APR is even higher.
As you can see, a payday cash loan is very expensive compared to other types of loans. Unfortunately, many consumers become trapped in repeat borrowing cycles due to the fact that they simply are not able to pay back the entire loan on time because of the triple-digit interest rates. Some consumers end up taking out a second payday cash loan so they can pay the first one, which puts them into an even deeper debt trap.
A short term loan such as this should only be considered by the consumer who does not have any other way to come up with money that is badly needed. It is not recommended to take advantage of a payday cash loan just to do some impulse shopping for instance, as the interest rates are extremely high.