Usually when in need of urgent cash people look for fast ways to get a temporary loan. In these situations the most logical way seems to be getting a payday loan. Payday lender gives cash fast. The payoff is usually on the next payday. Paydays are usually payable after 2 weeks. The payoff id usually assigned on the next payday of the borrower.
Why people take payday loans
- Payday loans are not that high. Loans are usually under 500$
- Payday lenders pay loans fast
- Payday loans don’t have bad credit issues
- Lenders deal with borrower directly and no questions are asked
How to get a payday loan
Payday loans are given in shops and online.
The borrower submits a postdated cheque to the lender.The amount on the cheque is equal to the fee that has to be paid plus the amount of loan that is required.
The lender keeps the cheque and pays the amount required.
After 2 weeks the borrower pays the amount plus fee and the cheque is returned to the borrower.
Payday loans interest rate
Payday loans have one of the highest interest rate today. They are also the most costly way to borrow money. Average interest rate on a 2 week loan lies from 390% to 400%.
Late or no payment of loans
Most people who take payday loans end up not being able to pay it due to high interest rate or any other reason. Normally borrowers pay the extra fee any write a new check to get extra time to pay the loan and end up increasing or “rolling over” their dept.
In case borrower don’t pay on time but comes up with the money later then the assigned date the usual lender immediately add late loan payment fee to the amount. While if you can’t pay off the loan the lenders use different means to get their money.
The borrower ends up taking multiple payday loans from different lenders to pay the loans. These loans end up ruining the financial status of the borrower.
How to payoff payday loans
Paying payday loans is not an easy task but to payoff these loans you have to start from the basics.
Don’t take any more loans. This will stop the ever growing loan payments. Find a way to gather extra cash anyway possible like getting a second job, taking extra shifts, limiting home expenses etc.
Make paying loans top priority every payday. But if you can’t come up with the money anyway possible then see an attorney or get a legal advice.
Payday loan alternatives
Borrow from someone you know like family or friends whom you can pay off the loans easily and without huge amount of interest. Get a signature loan.Many banks offer signature loans with low interest rate that are easily payable over the period of few months.
If you don’t want to borrow money you can always sell something or rent it to get extra cash.