Payday loans are one of the most convenient ways of getting a cash advance today with practically no paperwork or other hassles. Defining Payday loans Payday loans are a short-term cash advance, when it is needed the most…usually between paydays! The money is given as a cash advance and is directly deposited into your personal checking account, after which the cash advance funds, plus a fee, are taken out of your account at the end of the loan which usually is your next payday. However, a payday loan is no substitute for long-term financial planning.
Payday loans also bail you out of situations of bounced checks and late payment penalties by making the appropriate cash advance available. Understanding The Cost Of Payday Loans Forewarned is forearmed!
Whichever payday loan company you may choose you must know what will be the fixed amount that you will owe upon completing your payday loan. Usually most payday loan companies charge around $20 to $30 per $100 of cash advance. Usually, most payday loan companies provide a cost-breakdown per 100-dollar increments that coincide with the rate. Furthermore, most payday loan fees are based on the duration of the cash advance. In such a situation, the payday loans company generally charges the payday loans finance fee and defers the principal payment over a longer period of time, usually another 14 days. The Other Hidden Costs There are several hidden costs in a payday loan!
A payday loan company may exercise a number of options to collect this cash advance: ·Sue you for the funds. ·Use a collection agency. ·Enter your details into a bad credit database which may limit your capacity to cash/write a check for commercial purposes. ·File a legal complaint for bounced-check charges that may leave derogatory information on your credit file. By now, it should be clear that it is not prudent to go for payday loans without being aware of the repayment structure.