Payday loans are usually loans that are obtained for a short period of time and are usually for a small amount of money. They are gotten based on the fact that the person has another paycheck coming. The person can get the loan by showing identification and paycheck stubs to the company giving them the loan. Do remember though that if you are trying to get ahead financially this is not the way to do it. While you get money quick, the interest charged on these loans is high and it is definitely not the way to get a head. Getting one of these loans, in the end would actually put you further behind.
You might wonder who gives these loans since banks give out other loans and they are bound by how much interest that they can charge. Check cashers, finance companies, and other firms usually give these loans. These types of loans became quite well known quickly because of their advertisements on television, radio, the Internet, even email. These ads contain information about the loans as well benefits of the loans. They of course, do not contain warnings about the dangers of the loans themselves. These ads made the loans very popular throughout the world with more and more customers considering applying for them all of the time.
In order to apply for the loan you must have a bank account, identification, and a paycheck stub. You write a check for the amount of the loan that you want as well as the fee that you will be charged. Usually, the check is held until your next payday which is when the company collects the repayment of the loan as well as their fee. The fee is usually quite high in comparison to the amount of the loan. The loans are usually not a large sum of money, often $500 or less.
There are some options as a short term payday loan customer that you may not know about that we have not discussed as yet. One option is, of course, to allow the check to process as it would normally, as discussed above. Another option would be to go in person and pay off the loans in person prior to the cashing of the check that they have on hand. Yet a third option would be to extend the loan that you have. This can be done two times and of course, with additional fees applied. These fees are very costly, so of course, this option is not recommended.
It is said that there are instances where lenders may charge $15 to $50 per every $90 borrowed when giving out these loans. This is every time they give out one of these loans. So, if you were to extend your loan period you would pay this entire fee again, possibly twice if you did it for the two times allowed. In this case you would use the entire amount that you borrowed just to pay the fees. This hardly would make borrowing the money worth it.
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