Payday loans are an expensive way to borrow. Regardless of your situation, and as dire as you feel it may be, you should not take out a cash advance loan unless you are positive that you can repay it in full and on time. Otherwise, costs can spiral out of control. Here are a few things you need to know if you are thinking of getting one.
How Do These Payday Loans Work?
Payday Loans are quick cash loans designed to tide you over until the next payday. Once the loan is approved, it is deposited directly into your bank account. You repay it all in full plus interest and charges according to the payment schedule. You can borrow for periods longer than your next payday applying for installment loans. Repay the loan amount in small fixed monthly installments.
Same day loans, one-hour loans, no credit check loans are high cost, short term, and often for small amounts. If you can’t pay the amount back in time, a payday loan can get bit expensive. So, think carefully before choosing one.
What does a Payday Loan Cost You?
The cost is capped these days by regulation from the state and federal laws. The laws now applied put a limit on the interest and default fees that you can be charged. An overall cap means that you will never pay back more than twice what you initially borrowed.
Some lenders may require you to set up a payment authority with your bank. That means they can automatically have funds paid from your bank account.
It’s handy, but it can also be risky. Unless you are budgeting well, you might find your account won’t have enough money in it to pay other bills, like rent or other essentials such as food and heating. The auto payment might take you over your overdraft limit as well. That means bank charges. This is something you can discuss with the lender to seek out other ways that give you better control.
How to Avoid PayDay Loan Traps?
Whatever loan you might have, be it a payday loan or an installment loan, and you are having problems with repayments, the lender may offer you an extension, or deferral, or rollover. The lender might even offer you a new loan.
There is a limit, and Instant Loans 24 will provide all the required information you need to make those decisions. They will also provide you with details of free debt advice providers.
That great solution for rolling over your payday loan might have seemed good at the time, but it can cause problems as you end up paying back much more in interest and other fees. Your initial struggle when you wanted that same day loan has now become a worse situation. This could leave you struggling to pay for the essentials you need.
When NOT to use Short Term Loans
Lenders advertise their online payday loans to cover every crisis imaginable, but you should not be applying for one if it’s to be used:
- To pay off another loan.
- Or if you already have one or more of these cash advance loans.
- If you aren’t certain you can pay it back on time.
- You want it to pay for things you don’t need that you can’t afford – such as nights out, new clothes or concert tickets.
- If you’re struggling to repay loans, credit cards, and other bills, you can get free, confidential advice from a debt advice service.
They can advise you on how to get your personal finances back on track and can even negotiate with people to whom you owe money. Sometimes, all you need is that extra time to repay debts, so you don’t have to borrow any more.
At Instant Loans24 we are fully aware of all the negative aspects and are happy and willing to advise you before you take up the borrowing option.
If you’re short of money this month, really think about whether you’ll have the money plus interest next month? Are you expecting extra income? Or are you going to have to cut back considerably on spending? Perhaps you should consider an Installment loan as a better choice for you.