Payday loans are generally short-term loans that are secured against an individual's next paycheck. The loan is usually taken when one has an emergency situation and they need a small amount of cash which they pay back when they get their next paycheck.
Payday loans are usually available online and in some local stores. To get the loan, one is required to present a personal identification document and a proof of income after they visit site pay-dayloans. In addition one is also required to have an active checking account.
The application process for the loan is simple and normally the lender will present you will the legal documents stating the exact conditions of the loan, including late fees, annual interest rates and finance charges. After signing the documents you will then receive the money.
The amount of loan given will vary depending on your income and the loan may be paid back bi-weekly or monthly depending on when your next paycheck arrives. The higher the income the more money one is allowed to borrow. The fee charged on payday loans depends on the amount one intends to borrow.
Several financial management experts discourage payday loans practice because these types of loans have a very short term and their annual percentage rate (APR) can be very high.
When the borrower is unable to pay back the entire loan amount with the paycheck, the outstanding balance usually incurs additional interest fees and late charges. If one fails to pay the loan for several months, the accrued interest may surpass or equal the original loan amount.
Although the conditions and terms of payday loans may not be very favorable, there can be extenuating situations which make them attractive. It is recommended to borrow only the amount which you can be able to pay with your next check. Also consider borrowing payday loans only in case of severe financial emergency.
In order to get the best deal
, it is always important to shop around and compare the rates and fees of different lenders. You also need to read and understand the conditions and terms of the loan very well prior to signing any agreements.
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