In an emergency situation, payday loans are a viable option. Although payday loans can be helpful, they can also be very dangerous. Continue reading to learn some crucial knowledge on payday loans.
It is not uncommon for individuals to have no alternative but to seek payday loans. It is best to avoid this type of borrowing if at all possible. If you have a family member or a friend that you can borrow from, try asking them before resorting to using a payday loan company.
Payday loans can be helpful in an emergency, but understand that you could be charged finance charges that can equate to almost 50 percent interest. This huge interest rate can make paying back these loans impossible. The money will be deducted right from your paycheck and can force you right back into the payday loan office for more money.
Always consider other loan sources before deciding to use a payday loan service. It is a wiser choice to borrow emergency funds from a friend or relative. It can also work well to get a loan from your bank or to use a credit card. Payday loans charge higher fees than any of these alternatives.
If the funds are not available when your payment is due, you may be able to request a small extension from your lender. Most payday loan organizations will offer you a one or two day extension. You will, however, pay more for an extension.
If you are thinking of getting a payday loan, do not borrow a lot. Of course, these loans come in handy when emergencies arise. However, the amount of money you will be paying for interest is a lot higher than the interest on a credit card. Keep your costs down by borrowing less.
Always have enough money available in your bank account for loan repayment. If you do not go in to renegotiate, the payday loan company will try to take the owed amount from your bank account. Your bank will assess fees for insufficient funds, which will make it even harder to pay your loan back. Always make sure that you have the money available.
Don’t panic if your payday lender asks what your bank account numbers are. Often, consumers do not want to share this type of information and may not apply for the loans they need. However, the purpose of payday loans is paying back the company whenever you are next paid.
Your credit record is important when it comes to payday loans. You may still be able to get a loan, but it will probably cost you dearly with a sky-high interest rate. If you have good credit, payday lenders will reward you with better interest rates and special repayment programs.
Expect the payday loan company to call you. Each company has to verify the information they receive from each applicant, and that means that they need to contact you. They need to speak to you in person before they approve the loan. Therefore, don’t give them a number that you never use, or apply while you’re at work. The longer it takes for them to speak with you, the longer you have to wait for the money.
The cost of a payday loan can be high. Thankfully, this article will help you borrow smartly.