Do you have to find a quick source of cash? Do you have too many expenses and not enough cash? You may be thinking about getting through this situation with a payday loan. While a loan can be a great option, it is always important to get all the information before you proceed. This article will give you some great info about what to expect from a payday loan.
Make sure that you understand exactly what a payday loan is before taking one out. These loans are normally granted by companies that are not banks; they lend small sums of money and require very little paperwork. The loans are accessible to most people, although they typically need to be repaid within two weeks.
Regardless of your circumstances, never piggy-back your cash advance loans. Choose one payday lender and stick only with that company to avoid getting into a financial quagmire. You may find yourself unable to repay the loans, regardless of your income.
Understand what APR means before agreeing to a payday loan. APR, or annual percentage rate, is the amount of interest that the company charges on the loan while you are paying it back. Even though cash advances are quick and convenient, compare their APRs with the APR charged by a bank or your credit card company. Most likely, the payday loan’s APR will be much higher. Ask what the payday loan’s interest rate is first, before you make a decision to borrow any money.
Payday cash advances can be helpful in an emergency, but understand that you could be charged finance charges that can equate to almost 50 percent interest. This huge interest rate can make paying back these loans impossible. The money will be deducted right from your paycheck and can force you right back into the payday loan office for more money.
If you are considering taking out a payday loan to repay a different line of credit, stop and think about it. It may end up costing you substantially more to use this method over just paying late-payment fees on the line of credit. You will be stuck with finance charges, application fees and other fees that are associated. Think long and hard if it is worth it.
The pressure to pay back bills, especially those that are past due, can be overwhelming. With any luck, this piece has helped you understand how payday cash advances can be used wisely in times of trouble.