Do you often find yourself in a situation when your pocket is empty until your payday? A payday loan is your indispensable option. A stable salary is a confidence in the future. Even if it is not very high but it comes to the family budget on a regular basis. It allows you to distribute and plan your expenses. Nevertheless, life always makes its own adjustments to our plans. It would be boring to live according to a strictly developed scheme. Therefore, it is good when unplanned events burst into our everyday life. You need to be able to enjoy them, and you can always reach the paycheck with the help of a payday loan. However, they are expensive. Sometimes the interest rates are in the triple digits, which means you could end up paying back more than twice what you borrowed.
A payday loan is a special type of consumer loan that can be obtained in a few minutes. Thanks to it, you can borrow money to paycheck even without numerous references, as you can do at Directloantransfer.com. Loans before payday are issued by commercial credit firms, and a passport is the only principal requirement. Use a payday credit when the need arises and you will never need money. Payday loans should only be used as a last resort since they’re so expensive. If you find yourself in a regular pattern of using them, you need to reconsider your current lifestyle. There’s no problem needing one in a rare case when it’s literally the only option, but when you go to get that second payday loan, you need financial help.
A loan consumer writes out a check due to the lender with an amount that a borrower needs to obtain (including fees that a borrower has to pay). The financial organization provides a borrower with the amount of the check minus the commission and allows to keep the check until the debt matures the next payday.
With the allowance of the borrower, the organization shall electronically deposit the borrowed amount minus the commission into the borrower’s current account. The payday loan amount is written off the following payday. The charges on the loans suggest a percentage of the face value of the check. They are based on increments of obtained funds. A borrower will charge new extra fees each time the loan is prolonged or “rolled over”.
Almost any loan is better than a payday loan. Before you decide to take out a payday loan, consider some alternatives:
- A small loan.Some banks may offer short-term loans for small amounts at favorable rates — much better than payday loans offer. A local community organization can provide loans to small businesses to people. Cash prepayment by credit card may also be possible. However, it may have a higher interest rate than other sources of funds. Be ready to check the terms before making a decision. Anyway, shop first and compare all the available offers.
- Shops with the lowest cost credit offers. Compare APR and Funding Fee which includes loan fees, interest, and other lending costs. Military personnel has special protections against extra high fees or rates. All consumers in some states and the District of Columbia have some protections regarding rate limits. Even with this kind of protection, payday loans can be expensive especially if you roll-over the loan and are responsible to pay additional fees. Other loan offers and auto loan refinancing can come with lower rates and costs.
If you are having trouble making payments, then contact your lenders or lender as soon as possible and ask to prolong. Many may want to work with customers who they believe are acting in good faith. They may suggest renewals on your accounts. Be sure to find out if you will be charged for this service: late fees, additional finance charges, or a higher interest rate.
The annual interest rate on the payday loan is between 300, 400%. The fact is that lending small amounts of money for short periods is banally expensive. The borrower must necessarily have a place where the work will be done, an office or a store. Someone has to be giving loans and getting paid. These are just significant costs. A borrower needs to charge $10 per loan to cover these costs. This has nothing to do with the interest rate mind. It’s just what it costs someone to go and say that you would like to borrow $200.
They borrow for two weeks, that is, $10 is 5% of the loan amount. The fact is that now everyone calculates this loan fee as an annual interest rate. If the money were recalculated 26 times to make 52 weeks of the year, then this fee would be charged 26 times. Even without taking into account the accrual of interest, the annual interest rate is 130%. Note that until now no one has even charged interest even if there is an annual interest rate of 130%. This is obvious to anyone who thinks a little about this subject. Part of the very high annual interest rates is due precisely to the fact that a fixed commission charged over a short period of time is added to the annual interest rate. This is an artifact of how the annual interest rate is calculated.
As the world experience says, many troubles could have been avoided if it had been possible to prepare for them in advance. It would seem that everything is planned out before salary and nothing portends force majeure. But something happens at the most unexpected moment. For example, money is intended only for household needs but there is a need to buy expensive medicines. A payday loan can be issued by online lenders. This service can be very useful in an emergency even though it is paid. Moreover, you can use it not only at an unpleasant moment but simply to make life better.
You can take a payday loan for:
- An interesting trip. Perhaps friends invited you to another city for a weekend, or maybe an educational excursion is planned at school. It is not always possible to immediately allocate funds for such entertainment but payday loans allow you not to give up new experiences;
- Your dreams. Imagine that your favorite band comes to your city, or well-known actors give a performance that you have always dreamed of getting to. Unfortunately, your budget is in no way designed for such expenses at the moment. If you take money before a paycheck, you will not miss a unique opportunity;
- Education. Today we are offered a huge number of training and courses that help to develop and improve qualifications. Very often, a payday loan is the only way to get such training. There are a lot of options when payday loans can come in handy.
Just because you can use it doesn’t mean you should. The only responsible use for a payday loan is when there’s an emergency and it’s your only option. Once you’ve had to take one out, you know you need to make some adjustments in your budget so it never happens again.
Of course, you shouldn’t be afraid to use such a payday credit. Don’t let stereotypes and fears interfere with the fulfillment of a dream or take advantage of a unique opportunity. Online lenders with a good reputation are ready to become reliable assistants and honest partners who will always lend money up to paycheck and carry out an honest calculation. Just know what you’re getting into. For example, if you’re ok paying $1,000 for a $500 loan over time, then by all means do it, but know what you’re getting into.