An Honest Look at Payday Loans Stores
Payday loan stores can loan you the amount of money to address your financial emergency. Payday loans stores can be a good source for quick cash advances, especially the 24-hour payday loans online stores, but you have to exercise caution. The Internet is rife with scam artists, and any payday loan corporation might just well be a scammer in disguise.
How do payday loans work?
A payday loan, as the term suggests, is a loan you take payable on your next payday, or, at most, the payday after that. That means that it is payable in 15 days to 30 days.
The requirements for a payday loan application are minimal compared to a traditional bank loan, which requires more identification and documents from you. Also, the bank loan applications take longer to process, so if you are in dire need of cash right now, it may not be helpful.
Payday loans stores can approve your loan application within one day, so you can get your cash advance quickly. In fact, some online payday loans stores boast of a very quick lead time, in which you can get your loan in a few hours, or even one hour. For the person sorely in need of money, this is an attractive offer.
Once your loan is due, you can usually pay for it in different ways, like from your bank account (which will automatically be debited by the payday loan corporation), money orders wire transfers, or a check. The entire process can be quite easy and straightforward.
The catch with payday loans
However, payday loans might not be that easy on your pocket if you are not careful.
First of all, the interest for payday loans are very high; possibly the highest there is among all financial organizations, considering that the payday loan is just a short-term loan.
For example, if you borrow US $100, your fee for borrowing is usually US $25 to US $30. If you do not pay it within the next 15 or 30 days, the payday loans stores automatically roll over your loan to the next 15 days or 30 days. In doing so, they will have a finance charge.
Meanwhile, some loan stores will debit the amount from your bank account. If you do not have enough money there to cover the loan payment, both the payday loan store and the bank will charge you a fee.
Because of the problem with the automatic debit from bank accounts, it is best for you to pay via money orders. However, only do this if you are sure the bank account will have sufficient funds to cover your loan when it is due.
The annual interest of a payday loan ranges from 300% to 900%, which is dangerously high. If you are not careful with your money management, you can end up in very serious debt soon, and all because of a payday loan.
What if you need a fast loan?
Sometimes, the processing period takes shorter than 15 days, so if you can wait it out for a few days, then a cash advance from your credit card company may be your best bet.
Also, check if you are qualified for an overdraft with your bank. You just have to learn how long the processing will be as well, to know if it will be convenient.
What if payday loans are your only option?
As long as you do your research well, a payday loan can be manageable. You just need to pay your payday loan within the next payday to avoid getting yourself into further debt.
You have to find legitimate payday loans stores, and you can do this by reading third-party user reviews on the Internet. Better yet, instead look at reputable credit rating firms’ listed and recommended companies. The interest offered by legitimate payday loans stores may be higher than that of the lesser known payday loans stores, but at least you can be assured that you will not be scammed.
Also, when giving out information to the payday loan store, do not give out very sensitive information, such as your social security number, to keep yourself safe from identity theft. Besides, legitimate payday loan stores usually only require you to give your proof of employment or income, as well as your residential address.
Exhaust all other financial options first. If you do need to take out a payday loan, exercise due diligence and caution. Always make sure you are dealing with legitimate payday loans stores, and limit the personal information you give them.
So, if you need cash as soon as possible, let payday loans stores be your last resort.