What should everybody know about payday loans?

Are you short of small amount of cash right now? You need it quickly and without too many questions asked? You can repay it with interests within few weeks? Then payday loan might be the right solution for you. That is the quickest way to obtain emergency cash.

These loans are small in amount and concerning payoff timeframe but they can be real life saviours for some situations. For example if you have some emergency medical expenses, or bills that have to be paid this instant and you are out of money. These loans are very available since there are branch offices of the companies offering these loans everywhere. There is good possibility that you have such office somewhere in your neighbourhood so if you are in real emergency, you have the option to remedy the situation. You can’t have much money from it since these loans are usually in amount up to $1000, but that is the whole point. It is hard that anyone can borrow you $50000 for emergency.

These handy loans don’t need much paperwork, as they are approved without credit check. Also, they are approved very quickly and you will have your money in less than 24 hours. Of course, these loans have some serious downsides which should be treated with caution. First of all, the timeframe for their paying off is very narrow. You have only several weeks to pay it off and any delay with your pay check will cost you dearly since these loans are extremely expensive. That is second serious downside of them. Namely, the interest rate on these loans is several times higher than with conventional loans. Interest rate plus expenses varies from 15% to 20% and that is some serious money. So, if your pay check is late and you are late to pay off only one day your expenses will be more than doubled. For example, on borrowed $1000, you will have to pay about $1200 in few weeks if you are on time, but if you are late only one day it goes to over $1400. If you aren’t careful enough with this type of loan you can get in to really big trouble and huge debt over petty loan. So, be sure that you will be able to pay back. One good way to avoid this situation is to authorize the loan company to withdraw the funds directly from your current account. That way they will get their money on time no matter what. The only problem may be caused by overdraft if there is no enough money on your account. Still, it is better to have small dispute with the bank than to get in to serious debt. The bank will probably change your credit rating a bit and fine you couple of bucks but it’s all small potatoes compared to devouring interest rates on payday loans.

Bottom line is, be extremely careful with these handy loans as they can backfire in your face hard if you aren’t cautious.

Some possible uses for payday loans

There is an opinion that payday loans are only taken by people who have no other way out and by people who are so destitute that they cannot count on their bank or their credit card company to provide them with new loans. Well, the studies have been made and the simple fact is that payday loans are actually most commonly taken out by middle class people who find themselves in certain situations in which they do not have the time to go through the approval processes that are involved with other types of loans and in which they need the money as soon as possible and that is what payday loans do the best.

For example, a very common use for payday loans is for repairing something that is quite urgent. For instance, if a pipe breaks in your home, you cannot really wait a week or two before you get it fixed. And if it is the end of the month, when you have already spent your entire monthly budget and your credit card is maxed for any reason, you do not really have a $1,000 to cover for the plumber. And this is just an example; there are innumerable other repairs around the home and the car that are very urgent and that can cost quite a lot of money. This is where payday loans are simply perfect. You get the money that same day or the next day and then you simply repay the money come your next payday.

Sometimes you might need some financial help to take care of a bill that you have left unpaid for some reason. It is not that difficult to imagine such a situation. For instance, even though you usually pay all your bills on time, one month you decide to leave a single bill unpaid. And then you forget all about it come next month as you usually take care of your bills on time. And then, after a few months, a warning comes and you have already spent all the money that you set aside for bills monthly. What do you do? You take out a payday loan and cover that single bill that hit you like a ton of bricks out of nowhere.

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