subject: Take Care Of Unexpected Bills With Check Advance Payday Loans [print this page] With all the talk about check advance payday loans in the news and advertisements, it is no wonder so many people who find themselves in a financial pinch turn to these types of loans to survive until the next paycheck arrives. With all the talk, good and bad, there are some common sense questions that should be answered before a loan is attempted. Ignorance is not bliss when it comes to determining the total cost of a payday loan and whether or not it is the best option for a consumer.
As the name implies a payday loan is a loan advanced to those who find ends are no longer meeting between paychecks. To bridge the financial gap, establishments offering short term loans, which come due with the next payday, are utilized. Such loans can carry interest rates of 400 percent, even though the loan can be for no longer than a 2 week period of time.
Know what your state regulations are for payday loans. A consumer group or an Internet search would easily make a potential customer aware of the legislation pertaining to such lenders. Be aware of how much a lender can legally charge for such a loan so that you can determine the honesty of the institution you are about to do business with.
There is some flexibility in repaying the loans. The borrower could simply repay the amount borrowed along with the fees associated with the loan in one lump cash payment. The transaction would be closed and no further need to deal with the lender exists. Another option is to give the lender a predated check that would be deposited shortly after the paycheck is deposited. Or, some have opted to give electronic access to the lender, which allows automatic withdraws from an account to occur.
A payday loan could be an ideal solution to an unexpected emergency when cash is needed and not readily attainable. For example, a family member is suddenly hospitalized, or an automobile suddenly breaks down. Obviously, when these events occur, your financial liquidity may not match your needs.
Consider if it would be cheaper to get a cash advance on a credit card or pay the extremely high fees attached to a pay day loan. In some cases the cheaper of the two is actually the pay day loan, since you can quickly pay off the debt with one payment, unlike credit cards with their revolving fees and charges.
Just as there are traps with credit cards, so too with payday loans. Revolving or roll over loans can put you in a financial hole you will not be able to crawl out of. Avoid the cycle of debt such easily obtainable loans can begin. Do not permit yourself to take the easy way out and agree to roll over your loan, merely paying the interest on your loan. Likewise, do not begin doing business with numerous payday loan establishments, robbing Peter to pay Paul, as the saying goes. Such would not be using the loans in a responsible way.
by: Josie Olson.
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