Rates on payday loans can be as high as triple-digits. That being said, payday loans are a viable option for people who need money quickly and have nowhere else to turn. The key is knowing your options so you don’t get stuck paying more than you intended or taking out a loan that will cause even bigger problems in the future. This post discusses what payday loans are, how they work, and why it might not be worth it to take one out—even if you really need the cash!
What You Need To Know About Sky High APRs
Payday loans work kind of like a payday advance, which is why they’re often seen as similar options. But payday loans and payday advances are very different from each other! In this post, we explore the differences between payday loans and payday advances—and discuss whether or not getting a payday loan to pay off your payday advance might be a good idea.
Some people turn to their credit cards when they need fast cash, but that can end up costing you more in interest over time. Credit unions offer affordable short-term personal loans for those who qualify, though approval is subject to underwriting criteria. If installment payments aren’t enough it may make sense to consider borrowing against an existing 401k retirement plan balance through a hardship withdrawal if your financial situation qualifies.
Finally, credit card companies offer payday loans that can help you bridge the gap between paychecks if needed. Though they may carry high interest rates and steep fees, payday loan options are available to those who qualify.
The post discusses that a payday loan is a form of short term unsecured personal loan which helps with immediate cash needs when your next payday seems too far away or money expenses come up unexpectedly, whereas payday advance is an expensive way to get quick cash by taking out one’s paycheck early before it arrives on time in exchange for paying back with interest over the course of several weeks/months rather than all at once like with traditional payday loans. It also points out that borrowing from family & friends, payday loans, credit cards, and cash advances are all options when it comes to needing fast cash.
Payday loans can get expensive fast, payday advances are an expensive way to get quick cash by taking out one’s paycheck early before it arrives on time and payday loans are a viable option for people who need money quickly and have nowhere else to turn.
What payday loans are good for?
Payday loans can be a good option if you need some quick cash and have nowhere else to turn. Some fringe benefits of payday loans include: – Fast access—money from payday lenders is deposited directly into your bank account once it’s approved, so long as the funding is available in their accounts payday loan approvals often happen quickly, too. A few hours after applying, money could be sitting in your checking account, ready to go!
This speed makes them very different from other types of credit such as personal or home equity lines of credit (HELOCs). In those cases, there might be an initial wait period while underwriting takes place before approval becomes final.
Applicants don’t need good credit, payday lenders won’t check your credit score, so you might qualify even if you’ve had trouble getting other types of financing in the past. They’ll just verify that you have an active checking account where they can deposit money once approved for a loan; payday loans are also much easier to get than traditional bank overdrafts or payday advances from peer-to-peer (PTP) lending platforms like Lending Club and Prosper. Both those options usually involve waiting until your next paycheck before receiving funds—this means it could take weeks to access emergency funds instead of hours with payday loans However, as we’ll discuss below, payday loans might not be a good choice for everyone—even if you need the cash.
Most major payday loan providers offer their services through an easy-to-use website that doesn’t require any paperwork other than basic personal information like your name and address to submit an application (some companies do still require faxing in the documentation). Oak Park Financial is one of the payday loan providers that provides a hassle-free application. “You can often complete much of this process from home or even while sitting in line somewhere during lunch break If it’s hard for you to get to a payday loan provider’s physical storefront, this might not be an issue for you” says Algernon Ronson of OakParkFinancial.
Payday Loan Application Process: What does payday lending look like?
Once you’ve submitted basic personal information and chosen how you’d prefer payment (like through direct deposit), payday lenders will check your bank account to make sure it has enough money in it to cover the loan amount. If this is the case, they’ll deposit the borrowed funds directly into your checking account (you’ll still owe them back on payday). You can then use these payday loans as you see fit—like for emergency expenses or a large purchase that needs to be paid off quickly.
FAQ About Payday Loans: Are there any restrictions?
One great thing about payday loans is how flexible they are when used responsibly. The short repayment term means borrowers have plenty of time to repay what they owe without interest charges accumulating each day until payday arrives Some online payday loan providers even let customers choose their own due date as long as the payment gets deposited into a bank account within a certain timeframe.
Payday Loans Pitfalls
The payday loan trap is easy to fall into, but that doesn’t mean it’s a smart idea. The most important thing to consider before taking out any payday loan is how you’ll pay the money back with interest. Are you willing and able to come up with the full amount of your original payday loan plus fees at your next payday?
If not, then no matter how much cash advance companies are offering now, you will end up paying more than what was originally lent in fees alone. It might sound like common sense, but don’t take out a payday loan unless you know for sure that there will be enough left over after bills are paid on your next payday!
Be careful if payday lenders attempt to roll over the loan or add extra fees. This means that you have not been able to pay back your payday loan in full on time and now owe even more money!
