People who are experiencing short term budget shortage a week before the next payday are the ones who usually get attracted to payday loan or cash advance. Although this type of loan earns relatively high interest, there are still those who opt for it because of its convenience and flexibility in terms of payment. However no matter how you desperately need to make a cash advance it is imperative that you carefully think of the consequences attached to it, because you might end up in an unending process of cash advances.
Here are some facts about payday loans that you might want to know:
As with any other loans there are criteria and requirements that must be met before the loan is granted. The requirements include being 18 years old and above, you must be a full time employee or have a regular source of earnings and should be expecting a paycheck anytime between thirty to forty five days. If you have some sort of child support payments, that will do. You must have a bank account preferably a checking account as well as a good borrower standing reputation. You must also be an American citizen and a resident to be able to qualify for this cash advance.
The Money Interest
The interest as mentioned before is extremely high, and so it is important that you understand this consequence before filing for a payday loan. The fees and the interest rate depend on which State you reside. But generally around 15 to 20 percent interest is charged per month, and this is why a payday loan is only used for short term financing alternative because you can't imagine how much interest you would have to pay if the loan can be repaid in one year term.
However if look closely into it, a payday loan is an easy money, a loan that can be done without doing a credit check, it is a loan that you can file and see your bank account an hour after approval and withdraw the fund as easy as that. Of course there is a reason why the loan is easy to get, and that is because they charges high interest rate. So before making this cash advance be sure that you can repay it the soonest time you can, to avoid having to pay in double if not triple.
The repayment Scheme
As the name loan name implies payday loans are considered a bridge that gaps your financial shortage up to the next payday, so this means that you are giving the lender the rights to your next paycheck. This may sound brutal but how else do you think these lenders get paid, right? Anyway some lenders allow extension, so you can make partial payment for this payday's check and the other half in the next, however there are some States that do not allow this because of the high interest rates, but there are those that do.
Generally once you made the loan you need to make full payment for no more than forty five days. However if you think that it would ruin your budget if you do so you just have to talk to your lender about it and you can both decide it.