Stuff you need to remember about payday loans
If you have not heard of payday loans by now, it is safe to say that you have in the last few days or you wouldn’t be checking out our blogsite about these types of loans. Now that you are, we can let you know that payday loans can be extremely helpful in certain situations, but there are more than a few things that you need to know about these types of loans, things that will help you have nothing but positive experiences with these instant loans. It is our goal to help you achieve the most with your instant payday loans and to help you avoid the pitfalls of payday loans which some people do not avoid and then have troubles getting out of.
Payday loans are a very simple idea. They are short-term loans that certain companies or individuals lend you with high interest rates. In fact, they are best viewed as emergency loans due to these high rates. If you were to look at the APRs of payday loans, you would find out that they can range up to 780% percent. When you compare this to APRs of other types of loans, it is definitely a lot, but you need to remember that even these rates had to be set by the government which also regulates people who give out these loans and who are in the industry.
The main reason why the interest rates on payday loans are so high is that these loans are given to pretty much anyone with a steady income. Namely, the lenders do not check the credit rating of the applicants and the only thing they rely on is the proof of monthly income that can be both your pay and your social security benefits. They only require you to provide them with your debit card number and access and you are in most cases required to sign a predated check that will take care of the loan once you receive your next monthly paycheck. This works for both parties as the lender can rely on the money being paid back and you also avoid getting late with repayments, which can result in accumulation of rates that soon become exorbitant. Another reason why the interest rates are this high is that the default rates for payday loans are very high and that lenders need to cover for those expenses as well.
One of the latest advancements in the field of payday loans are websites that offer these loans which makes things much convenient both for you and the lender. You sign an electronic contract and you get your loan transferred into your account. In the same way, your loan is repaid when the next paycheck increases your account and this is mostly done automatically. The good thing about same day loans is that you have much more freedom in choosing the best deals for yourself, avoiding those lenders with extremely high interest rates and no breathing space for being late with the payments.
You should keep in mind that payday loans are not to be considered long term solutions and that you should never rely on repeated payday loans to take care of your financial situations. The high interest rates make them useless for such purposes as you will soon find yourself falling behind and paying more and more interests as well as fees that need to be paid when you are overdue, fees and penalties that can be quite serious. Still, for one-off type of loans, payday loans are a great thing and they can be more than helpful.