PAY DAY LOANS
For many of us the money seems to run out before the month
does. An increasingly popular stopgap measure for this cash
shortage are pay day loans. While payday advance loans may be
fast and convenient, these online loans may not always be the best choice when and if other than paydayloans are available to you.
The reason why we are seeing more
no fax payday loans advertising online and at check cashing
stores is because payday advances are profitable
for the payday lenders. Many of these companies are new to the business
and may not be well equipped to make payday cash loans and
provide reasonable customer service. A recent national survey
of online and storefront payday lenders found that only 37% of these lenders
were straightforward about
their effective annual interest rate. Although the average fee is $30 - $50
because the loan period is very short the average annual
interest rate for these unsecured personal loans is very
high - about 474%. If fees are involved, even among
traditional lenders, a short term personal loan is always
expensive, especially for poor credit loans..
This survey asserts that more than 3/4 of
pay loan borrowers cannot afford to repay the loan in full
on the first payday it becomes due so they roll the loan.
Rolling a paydayloan means that only a portion of the
principal amount is paid. The remaining amount of
the original principal balance, the old loan fees, plus a new loan fee are
rolled into a new loan. If there is any lesson to be learned
from this survey it is that you should not take a payday
loan unless you know for sure you can pay it back in full on
or before the due date.
The lender may have other
remedies. If your state law allows it, and you default on
what seemed like and unsecured loan, you may find out the hard way that have signed a
waiver agreement which allowed the lender to garnish your
wages without notice. Again, another reason to be sure that
you can repay any unsecured personal loans on time before going this route.
Fast payday loans can be expensive if not paid back on time.
You should first determine if there is a better option for you than a payday
cash loan. For example, if you work for a large company, you may be able to use
the funds in your 401K plan. Funds withdrawn from your
401K are taxed at 10%, less than payday loan fees, and if you repay the money withdrawn from your 401K
within a specified time period then the withdrawal may not
be taxed at
all.
The other side of the coin is that instant payday loans are a credit
source for people who would otherwise be completely shut out
of the credit markets. Unsecured bad credit personal loans
are not available from your neighborhood bank.
Sometime there are no good other choices. That's OK too so
long as you have done your due diligence and know what you
are doing with these faxless payday loans. If you have bad
credit you may find that professional credit repair is
cheaper than bad credit lending.
Deal with a lender that has been in business and knows
what they are doing. You can get cash in 24 hours
and take care of that pressing need. |
