How To Use Payday Loans Responsibly And Safely


For individuals who are considering using a payday loan, it is important to understand when you must pay it back. Effective APRs on these kinds of loans are hundreds of percent, so they need to be repaid quickly, lest you pay thousands of dollars in interest and fees.

Remember that the interest rates on payday loans are very high, before you even start getting one. There are times where a particular company might have interest rates as high as 150% - 200% for extended periods. Such lenders exploit legal loopholes in order to charge this type of interest.

One of the drawbacks to taking out a payday loan is that it is likely that paying it back will use all of your next paycheck. The money you received from the loan will have to be enough until the following paycheck since your first check should go to repaying your loan. Not realizing this can start a recurring cycle of debt that could last a long while.

Although many people do it for many different reasons, a lack of financial alternative is one trait shared by most people who apply for payday loans. If you can get by without taking out a payday loan, then that is always best, but sometimes circumstances require drastic measures to recover. Consider other options, like borrowing money from friends or family.

A key tip for those of you applying for payday loans is not to lie on your application. Although it is very tempting to fit a lie in, hoping that you can save on interest or receive a larger loan, this is a move that will definitely come back to bite you hard. It's simply not worth it to lie.

You need to have the right information to get a pay day loan. Each payday loan company has their own criteria and requirements, though you will probably be asked to submit a recent paycheck stub and proof of a checking account. Inquire by phone beforehand as to what documentation will be needed so that you save time when you arrive to apply for your payday loan.

It is important that you are aware of the extensive fees associated with payday loans. For example, you might need a loan of $200 and the lender charges you $30 to borrow this. The resulting interest rate is about 400 percent annually. The fees increase if you do not pay the lender back the next time you are paid.

You can find a lot of the information for certain companies with the Better Business Bureau. Before signing on the dotted line, look to the BBB for the company rating. If you find complaints, you may want to take your business somewhere else.

If you owe money on multiple payday loans, don't attempt to consolidate the loans together into one big loan. If you are unable to repay small loans, you certainly won't have the ability to pay off a larger one. Try to find ways to pay your loan with a smaller interest rate so you can out from under the payday loan.

Getting cash with a payday loan can be very serious. It may lead to lots of bank issues and your credit could be affected if it isn't handled properly. Always remember that payday loans are not bonus money. You might have to get it from somewhere else in the future.

Do your research on any payday lender before you trust them with your information. Read reviews on their service before getting involved with them. It is important to find a lender that has an easy to find privacy policy.

If you are going to do business with a payday lender that works with you long-distance, such as over the phone or online, try and find one that does not require faxing. Some lenders require you to fax pay stubs or other documents, but like most individuals, you likely lack a fax machine. That means paying one to five dollars for every page to a local merchant; meanwhile, you can avoid that by finding the right lender.

Sometimes, there is a high cost when borrowing money, as you should be aware of this. Even though you may see a lot of reports regarding the high price of such loans, there are times when you really need the money now. These loans come in small amounts, so the interest will not cost you that much. The interest can be very high and the loan usually needs to be paid off within two weeks to a month. Check your budget before taking out this loan. If you can't afford to pay it back in two weeks, you can't afford to get the loan.

If you're in desperate need of a quick payday loan, understand that it is of the utmost importance to pay that loan back by its due date. Whatever you do, don't refinance your loan over multiple pay periods. That way, you can minimize the interest you are charged.

Make sure that you explore all other loan sources before opting for a payday loan. Loan sources to consider include a personal loan from a bank or credit union, credit cards, and relatives. The expense of getting a payday loan is high, so if you can avoid it, it is best to do so.

Payday loans usually require the borrower to give them a check so that they can postdate it and take it out of your account. Be certain that the checking account has sufficient funds on the due date. If the check is returned, your bank will charge an overdraft fee in addition to fees charged by the payday loan company.

Don't let the stress of a bad money situation worry you any more. Payday loans can be just the thing to get you through a money emergency. Keep in mind that this is a better option than allowing your credit to be ruined. Best wishes with finding the payday loan that suits your needs.