There are a lot of unexpected things happening every day. Things like medical emergencies or some other kinds of financial emergencies, and if you’re like most people who don’t have any money in their savings account, you might want to know what a payday loan is.
A payday loan is quite different from a regular banks loan. These kinds of loans are usually for a smaller amount of money and for shorter periods of time.
For example, when you go to the bank you will take a loan and repay it over a few years, but with payday loans, it’s usually more like two weeks.
You can look at payday loan something like an advance on your salary. People call it different names, like payroll loan, short term, salary loan, small dollar loan, cash advance etc.
From these names you can kind of get the picture of what it really is. So how much money can you borrow?
The money you can borrow goes as high as one thousand dollars. It usually varies from 100 to 1000 dollars and as we’ve mentioned before, you will have to repay it in the next 14 days, usually when your next paycheck kicks in.
There are a lot of retails that offer payday loans and there are even some you don’t even have to visit personally, you can simply visit them online and ask for a loan.
So what do these companies ask for before they issue a loan? The answer is – not much.
They don’t care about your credit history or your savings account, the only important thing is that you will be able to pay it back, and ”paying back” should be important to you as well, and here’s why.
Payday loan usually has a fixed rate on 100’s. For example, you will pay 15 dollars for each hundred dollars you borrow. So if you borrow 500 dollars, you will have to return 575 dollars, but, if you fail to do so in a fixed time frame, you will get burned.
The interest rates and additional fees are incredibly high. If you fail to repay on time, you will have to pay a lot more. So while applying for a payday loan, make sure you will be able to pay it back when the time comes.
The information these companies take is usually regarding your personal information and your job. They will ask you to write a check for, let’s say 575 dollars which they are allowed to cash in from your next paycheck should you not return and pay it personally. If they can’t get that money from your paycheck because there is not enough, then additional fees kick in.
These kinds of loans are good for unexpected emergencies, but before you apply for any kind of loan, make sure that it is absolutely necessary. Take a step back and think about other options, if you can’t find any other solution, then apply for the payday loan.