The internet has hundreds of small payday loan sites that allows consumers to send their personal financial information electronically through the internet. This gives sites access to your accounts and can pose a high risk for the consumers. These kind of online payday loans are marketed through, online search, ads, referrals and email.
To get you started the lenders will ask you to fill out an application form including all your personal information.Then you will be asked to fax a check or bank statement and your signed paper work. The loan then will be deposited into your checking account.
Many payday loan lenders show a range of loans from £300 to £2500 but the most frequent offered was the £500 loan. These same day loans must be refinanced or repaid by the borrowers next payday. Theses kind of loans usually charge £30 per £100. Let’s say you took out a £500 loan the cost for that loan to be repaid is £650 that will be withdrawn from your checking account automatically by the lender. If you fail to have the money in your checking then the lender and your bank will be able to charge you insufficient funds fees.
Payday loans can be dangerous for consumers making the consumers feel trapped. The typical payday loan APR is 650%. Some lenders won’t show you their interest rates until you complete an application. Other sites only show the finance charge. The highest APR found for these payday loans was 780%
Often online payday lenders try to get the customer to sign a internet contract stated that customer will not close their checking account until the loan is paid in full or sign a contract saying you will not file for bankruptcy.No one should sign these types of contracts, this is not even legal in some states. Payday loans are way too expensive and too hard too pay back by your next payday.Consumers should look for other lower cost credit and compare rates that’s available.
Consumers like the convenience of these payday loans but in the long run you would be better off to avoid these kind of loans. Some states have even ban payday loans.
Although emergencies can happen and sometimes you need fast cash don’t look for payday loans. Payday loans should be avoided. If you have been using payday loans you should stop. These loans will give you nothing but high interest and headache. Look for other loans such as your local bank or credit union even if you have to get a co-signer.It would be better than paying back an APR of 780%. Payday loans can cause you to lose your car, your home, even your job. Some payday loan lenders even try to get you to sign contracts that have to do with your wages. I am sure a lot of companies wouldn’t like to see their employees get fired over a lender taking out money from your check just cause you needed some fast cash. Lots of companies would fire you before they let lenders garnish your wages. So please do not be fooled by these online loans they will only get you in deeper debit.
If you’re in dire financial straits a cash loan may look like a godsend, but it’s important to carefully consider your decision before reaching out to what looks like an easy solution. Payday loans are one financial tool that could indeed help you out of dire straits, but they are a tool that must be used with extreme caution. Otherwise you will find yourself in an even tougher financial situation later down the road.
Sure, you may have run out of cash between now and the next payday, but that doesn’t mean you’re facing an emergency. Do you have food in the pantry? Do you have gas in the car? Think carefully about whether you can hold out until your next pay cheque. Some people take out payday loans because they simply get nervous about having a very small account balance, and this mentality can be dangerous. Some people are pressured into getting same day loans by creditors who want their money right away: an expensive method of robbing Peter to pay Paul that is rarely necessary and often financially deadly.
If you’re facing a more serious emergency, like a sudden car repair that might keep you from getting to work or a medical need of some form then you might well have a genuine emergency that would require the intervention of a payday loan.
You might be tempted to think of a payday loan as a sort of early pay cheque. However, if you do that you’re missing two important parts of the equation. First, there is going to be a large interest payment. If you borrow £200 you’re going to end up paying £229.45. Can you afford the loss of the £29.45, or is that going to use up your gas money for a week? Furthermore, all of the same obligations will be applied to your next check as are normally applied. Can you afford to have a cheque that is £229.45 smaller? Will you be able to meet all of those obligations? Or will you find yourself in trouble nearly as soon as the next pay cheque is spent?
Some payday loan places suggest that you handle this problem by “stepping down” your loan by borrowing £200, then borrowing £100, and then finally by paying the whole thing off. It sounds good in theory but it’s hardly ever what happens. Typically you find yourself taking out the very same loan almost immediately, or you find yourself taking out even bigger loans to keep up with the fees.
Before you take out a payday advance loan ask yourself if you have other options. Can you do some odd jobs around the neighbourhood to take in an extra £20-£40? Would that give you what you need? Could you sell an item on Gumtree? Is there someone willing to lend you just a little bit of cash? Can you get the doctor’s office or car repair shop to bill you later or bill you in instalments? Can you return cans or bottles for just enough cash to get by? Do you have a friend or family member who will lend you $20 until payday so you can get some gas?
Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk