We are bombarded with the advertisement for payday loans and cash advances constantly. It is important to know what these types of loans are really all about and what you can use them for. If you don’t already understand what you are getting into if you take out a payday loan, then this post will help to introduce you to the world of the cash advance and payday loan store.
What are Payday Loans?
Payday loans were first created by employers to help their employees in a tight spot. If you needed a few dollars to help out with bills or with an unexpected expense, your employer would advance part of your weekly pay to help. This is not how it works anymore and very few employers will even consider this option.
However, there are many lenders that will gladly advance you $100 to $1,500 and give you up to about a month to pay it back. Since most people are paid bi-weekly, they will spread the payment over two pay periods and take it directly from your bank account.
The other way they go about getting their money is having you postdate a check for your next payday. Then, they deposit this check when the payment is due or you can come in and pay cash. If you pay cash they will give you the check back.
The problem with these loans is many people abuse them. The lenders make it really easy for you to just get another loan and end up in a cycle that is hard to stop. They will try to talk you into another loan, approve you for a larger amount, and make it very tempting to take out the second loan. Many lenders will even lure you into this trap with a “no interest” loan an introductory offer.
This does not mean payday loans are bad or should never be used. However, if you don’t use them properly, they could suck you into this cycle. You want to make sure you only use a payday loan in an emergency. Then, you want to make sure it is paid off on time and you move on with your financial life.
The good news if you use a payday loan properly and pay it off that same lender will be more than willing to lend you money if you deal with another emergency. It is best if you can avoid having to take out this type of loan, but sometimes life needs a little cash to help you get by.
What Payday Loans Are Not
Payday loans are not for down payments on cars, they are not Christmas loans, they are not meant for purchasing unnecessary items, and they are not a way to live. If you are living outside of your means and you find that you need a payday loan to help you survive, then you are not using these loans properly.
Since payday lenders approve nearly everybody, you may be sucked in by the bad credit, no credit advertisement that makes it seem like this is the only type of loan you can get. If you have talked to your bank, tried a non-conventional lender, and looked into other ways to get the money you want for something and you have not found it, there is probably a reason why.
If it is not a true necessity or emergency, then a payday loan should never be used. These are not loans for buying extra things or going out to the bar. They are loans for necessities like groceries, your electric bill, rent, car repairs, medical emergencies, and other emergencies that require fast cash.
Where can You get Payday Loans?
Payday loans can be found all over the place. You can find a local cash advance store to get your loan or you can hop on the internet and find a good payday loan within minutes with a simple search. Taking out a payday loan online has become the most popular way to go about getting your money. It is faster, more convenient, and you don’t even have to leave your house.
You should know if you apply for this type of loan online it can take up to 24 hours to receive your cash, but the process is only a few minutes long. Also, if you need more than $500, with most lenders, you will need to fax in a few documents to prove your income and that you are who you say you are.
The bottom line, there are many reasons to use a payday loan or cash advance, but there are also many things they are not for. Make sure if you take out this loan you can pay it back and you pay it back. They are short-term loans with a very high interest rate and if you don’t pay back a payday loan on time, the late fees may push you over the edge.
Payday Loans can be dangerous, but sometimes they are necessary. The best one you can get will give you more than 30 days to pay it back.
The Down Low About Payday Loans
During the tough financial scenario, a fast loan or instant cash is a good idea that works with accuracy in responding to a consumer’s money needs. Today, the world is full of financial animosity; it is a consolation if anyone can find a trouble buster capable of removing the financial distress immediately.
Ergo, as a sigh of relief, payday loans have helped people in money distress until they can get back on their feet. Also, with the click of a mouse, you can get a quick loan online that is credited directly into your checking account in a short span of time through “online payday loans”.
An online payday loan also implies that there is no need to complete annoying paperwork or the need to locate a fax machine to fax the paperwork. The only thing that has to be fulfilled is finding an authentic loan company and providing the site with some of your accredited details and voila! You have your loan processed in a matter of a few minutes!
When it comes to a payday loan, there is no need to worry about any leaks when you fill in your personal details because there are high-security internet filters installed by the payday loan organizations who ensure maximum security for the information you have provided online.
And everyone who chooses an online payday loan will remain protected and their details will not be published until permitted by the customer themselves.
Getting fax-less quick loans is a simple and straightforward process since there is no involvement of complex details that have to be fulfilled by a consumer. All you need to do is read carefully all the terms and conditions to make sure you understand the process and follow it carefully.
This is a highly essential part because a payday loan shouldn’t surprise your future financial endeavor during the conclusion of the loan period. Most reputable online loan companies are transparent and will extend help as much as possible for the benefit of the customer.
Hence it is up to the customer’s discretion to make a wise decision and have a good experience by choosing a good payday loan company in the market that offers friendly help, is flexible with its interest rates, has a good market reputation and works towards the benefit of a customer.
Is a Payday Advance the Right Solution?
A payday advance is a short-term personal loan than can enable you to make ends meet until you receive your next paycheck. If you don’t have any emergency savings stashed away, your credit cards are maxed out, and your friends and family members are also having trouble getting by, it can be hard to find the money to cover unplanned expenses when they arise. So is a payday advance the right solution for you?
Payday loans are convenient, but they’re not right for everyone. Here’s a list of advantages and disadvantages to consider before you apply.
Payday Loans are Fast
If you have an unplanned expense and apply for a personal loan from your local bank or credit union, it usually takes several days – even weeks! – for the application to be approved and get the check in your hands.
But if the furnace has stopped working or the car broke down and you can’t get to work, you probably can’t wait that long to get the situation resolved. Payday loan lenders provide customers with extremely fast turnaround times. Often the funds are wired into your bank account within 24 hours from the time you apply.
It’s Easy to Qualify
Let’s say you could wait for a personal loan, but the bank turns you down because your credit is less than perfect. Payday loan providers can get you approved, and often won’t even run your credit report.
You simply need to show that you have an active checking or savings account, are currently employed, and have a permanent address within a state that allows payday loans.
Payday Loans are Expensive
The reason several states have outlawed payday loans is that these lending practices are extremely expensive. The interest rate will be much higher than if you took out a loan from your local bank or credit union, or even took a cash advance from your credit card.
The total amount you will repay over the life of the loan can quickly add up to more than double the amount you initially received, once interest, fees, and service charges have been tacked on.
It Can be Hard to Discern Reputable Lenders
Not all payday loan providers are the same. The interest rate, fees, and amount you will be approved for will vary widely from company to company. Many unscrupulous lenders ignore mandated limits on interest rates and fees, requiring you to repay more than you are entitled to under the law.
It’s important to shop around and read the fine print before you agree to a payday advance. Be sure you understand the terms you are consenting to, and have the ability to repay the loan as agreed.
If you don’t have the time to wait, don’t have good credit, and don’t have anyone else to borrow the funds from, a payday loan can certainly help you pull through. But it’s important that you pay your loan back as quickly as possible, or the fees and interest will continue to accumulate.
It can be tempting to pay the minimum amount when each payment becomes due, but it’s in your best interest to repay your loan in full as soon as you receive your next paycheck.
Author Thomas Hathaway is a financial consultant and content contributor to paydayloans.org.uk, a site providing information and advances when you may need an advance to your regular paycheck.
The Gruesome Reality of the PayDay Loan
What do you do when your monthly paycheck provides barely enough money to get by, under normal circumstances, and all of the sudden your car needs an urgent repair? Many of us have had moments of financial desperation when it seems like just a little bit of extra money would be a life preserver. The payday loan is designed with those moments of financial desperation in mind, but are they really designed with the needs of the borrower in mind?
In “Praise” of the Payday Loan
I you walk into any Payday loan provider and ask them if they are doing good for society, they will probably affirm that they provide quick cash to individuals that truly need the money. According to those profiting from the payday loan market, here are some of the reasons that payday loans are good…
- Payday loans are easy to acquire.
- No credit check is involved they only require a salary stub to acquire.
- As long as they have a job, even people in the lowest income brackets are able to borrow money.
- Paying back a small payday loan after two weeks is cheaper than paying off a bounced check.
Although payday loan providers are happy to have you believe that they are benevolently providing a charitable service, at a low charge, let’s take a look at the gruesome reality of the payday loan.
A Historical Perspective
The early 20th century bred a new wave of salary loaning in America. Salary lenders offered short term loans at high interest rates. With the implementation of the Universal Small Loan Law, which was first adopted by a handful of states in 1917, and later by all of the United States, it became illegal to charge interest at higher than 3.5% per month for loans of less than $300.
After salary-lending became greatly restricted, certain bootleg vendors invented a new name for the same deal and they called it “salary buying.” “Salary buying” involved buying a certain amount of a clients’ future salary at a discounted rate. Salary buyers were able to avoid the restrictions on charging high interest simply by defining their service as buying salaries rather than loaning for them. Salary buying was outlawed in 1939 with the passage of the Uniform Small Loan Law.
Whereas loaning schemes with high interest rates were restricted to never charging more than 3.5% per month in the early 20th century, today, payday loan lenders somehow get away with charging interest rates of upwards of 30% per month.
What It’s Really About
The business plan of the payday loan provider is not based on lending money and taking a small percentage of that money for profit. Take the example of a $100 payday loan, for example. In order to pay back their loan, without any more recurring debt, the borrower would need to pay back the $100 plus an extra $15-$20 within two weeks.
That doesn’t sound too bad, but what about if the borrower isn’t able to pay back the loan within the 2 weeks? The horrifying answer is that the debt would keep piling up at an extraordinary rate. Within about 2-3 months, if not paid off, the payday loan doubles. Within a year the payday loan can cost many times the amount of the original loan.
Payday loan providers know this, and they depend on it.
The fact is that a huge percentage of the profits that payday loan providers make, is from those unfortunate borrowers who innocently take out a payday loan and can’t pay it back. All too often, payday loan borrowers end up going into such enormous debt that they need to take out more and more loans in order to get by from month to month. In lieu of the financial strains caused by payday loans, many states have implemented tighter legislation on payday loan lending.
Clearly, the payday loan is a very dangerous financial transaction. If you have no other source or resources, and you decide to take out a payday loan, make sure that you have a clear plan of how to pay it back on time.
5 Facts You Should Know About Payday Loans
Are you in a financial bind? Or perhaps you’re looking into your options for “just in case?” It’s inevitable that you’ll hear about payday loans at some point during your search for financial quick fixes, and that is exactly what payday lenders would have you believe about payday loans – that they are, in fact, quick fixes. The truth is, there is a lot more to it than that . . . and there is nothing simple about the decision to sign on for a payday loan.
Unfortunately, many consumers run head-first into the payday loan scenario without knowing a thing about it, then complain that it wasn’t all they’d expected. Yes, payday loans can help you if you’re in a bind, but they come at a cost. It’s your best bet to learn as much as you can about payday loans before you decide if they’re right for you, and the best place to start is here, with these five facts about payday loans:
Payday loans are fast and relatively easy to qualify for. That is because there is no credit check, as is required with loans of other types. In most cases, all you have to do is prove your identity and your income, and you qualify for a loan.
Because payday loan qualification is so simple and easy – and open to almost anyone – payday lenders are assuming a big risk in lending to you. How do they offset this risk? For one, they charge exorbitantly high interest rates. You can’t find any higher interest rates in the world of lending than right there in your payday lender’s office.
Many payday lenders require you to put up some form of collateral in order to obtain a loan. This may be a blank, signed the check, permission to access to your checking account, or even the title to your car.
There are serious consequences for not paying on your payday loan as agreed. In addition to risking the collateral you may have put up, you will also incur hefty late charges that can put you in even further in over your head and worsen your financial situation.
Don’t walk into a payday loan thinking you’ll be able to walk out with enough to pay those hospital bills or purchase a cheap car. Payday loan limits are small – usually limited to only a few hundred dollars – so payday loans are only good for very limited financial emergencies.
As you can see, there is much more to payday loans than the lenders might have you believe. Before you’re tempted into a payday loan office, consider these facts and decide if a payday loan is something you’re really willing to commit to.
Are Payday Loans Too Good To Be True?
In an ideal world, we would all like to have enough money to see us through the month. We go to work 8 hours a day and in reality, the salary we earn should be enough. Sometimes our salaries do not cut it and we are forced to seek extra money in order to pay for daily expenditures.
Saving as much as possible may not be enough, especially if unexpected bills arise. Asking relatives or friends to lend you money might be out of the question for some.
Of course, there are other ways to get hold of money without having to ask those close to you. Payday lenders can help you obtain money quickly with very few problems involved. Payday loans have both good and bad points.
How Do Payday Lenders Operate?
In essence, payday merchants offer short term loans to be paid back over a short period of time. The only downfall to these loans is that the interest rates are higher than normal. Approval of one of these loans is quite simple. You need to be employed and be over the age of 18.
Proof of income is also needed to ensure you are able to make regular repayments. Before applying for a short term loan you must make sure you fit the criteria. Credit checks will not be carried out so you do not need to fret about being approved should you have a bad credit history.
The Terms Of Payday Lenders
Once the loan is applied for the borrower must provide the right type of documentation in order to increase the chances of obtaining funds. When all the documents are assessed you will then be informed whether your application has been successful or not.
A payday loan is designed in such a way that you pay back the money on your next payday. Failing to pay back the loan on time could result in additional charges.
Be Wary Of Payday Lenders
There are numerous lenders available, such as Wonga, Uncle Buck, and Quick Cash. The loans are intended to be borrowed for only a short period of time and should therefore not be used as a long term solution. If the loans are paid back on time then you will not incur extra charges. When applying for this type of loan you need to ensure you are able to pay back the amount borrowed on time to avoid any hassles.
Payday Loans for Entrepreneurs
The dream of striking out and starting your own business is one that many people have, yet which not many people ever pursue and follow to its conclusion.
Starting your own company is a challenge no matter how prepared you think you are, no matter how many plans you set in place, and no matter how straightforward you expect it to go. There will always be huge challenges to overcome, bills to pay, and plans to make, and you want to take the process slowly and with caution.
Many experts suggest that those starting out on their first business venture should begin by working it in around their current jobs, in order that they don’t end up in the middle of a project that they can no longer fund.
After your 8 hours of daily work, chances are that you still have another good 8 hours that you can invest in other things—and some large portion of that can be dedicated to your new business.
Once your venture begins to take off, you can ease out of your old job into the new project, but at least in the initial stages, it’s important to have that safety net in case something goes wrong.
Another great reason to keep your old job when you first start out on your business venture, and a great benefit that is available if you do, is payday loans.
Most entrepreneurs need loans in order to really give their business plans and goals air under their wings, and payday loan is one of the easiest kinds of loan around. They’re only available to those who are employed, however, and self-employment isn’t enough.
You can take out one of these payday loans through an online application process, wherein you will be required to offer up personal and financial information that the lender can use to determine your eligibility.
We searched for information about open door loans and we’ve found that the main requirements for receiving open door loans, apart from employment, are that you be over 18 and hold a UK bank account. You’re most likely qualified on these counts as well, and if so, you should have no problem getting the money.
Once you’re granted the loan, the money is sent to your account with no hassle or hidden fees. You can then use the money for a whole host of things—as you know, the business of being an entrepreneur is not a cheap one.
They can help you with paying those initial business expenses, investing in equipment, funding growth and ideas, and affording those business startup fees. And when your next paycheck comes in, you can use it to repay the money easily and quickly.