There are endless debates about the validity of pay day loans. Opinions range from people who call it a form of greedy capitalism to people who consider it a boon in times of emergency. Whatever your take is, on this contentious issue, there is no denying the fact that in times of emergency a payday loan certainly comes to your rescue.
A reader of a financial column stated in his comments that he saw nothing wrong in these kinds of loans. He stated that he had taken a loan of $450 which was processed within 10 minutes. There was no credit check involved and at the end of the term which fell during his next pay cycle he had to pay back an additional $45 he felt this was a great blessing considering the fact that no bank would process a loan that fast and that too without checking your credit. The critics of pay day loan calculate it in terms of APR and state that it is a very high interest rate. Personally speaking these kinds of loans are fine as long as one doesn't make a habit of it and repays within the stipulated time.
So the big question is how you can use payday loans sensibly. Here are a few tips for you to use these loans when required and not get ensnared in a trap which lands you in deep financial crisis:
1) These loans should be considered as a short term solution to your financial crisis. Only borrow what you can pay back in the stipulated time. If you borrow too much and are unable to pay back in time you would land into a deeper financial crisis.
2) Another important factor that you should bear in mind is how much would the pay day loan cost you? Fees range from $20 to $30 for every $100 borrowed.
3) Find out to whom you are providing your financial information. There are hundreds of websites offering payday loans, however all of them don't actually give loans they just do lead generation for the big lenders.
4) Find out the maximum amount for which pay day loans are given. Payday loans can range from $500 to $1500, but due to the high risk involved in the processing of such a loan. You may not get the full amount at your first attempt at taking a loan. You have to prove your credibility as well as your loyalty to the lender.
5) An important point to consider before you apply for a pay day loan is to find out what are the repayment terms of the pay day loan. Please remember do not borrow an amount that you need but are unable to pay back in your next pay roll. But if you wish to roll over your payday loan to the next payroll, it is imperative that you are aware of the terms of repayment of the pay day loan. Most pay day loans offer you the option of extending the terms of the payday loan. They allow you to pay only interest or they allow you to pay interest on the pay day amount plus a minimum. These rules differ from state to state. Check carefully what the laws in your state are. However on a regular basis there is a $25 increase.
Keep these tips in mind and make use of the facility of payday loans to ward off those times of emergency.
0 comments:
Post a Comment