Posted on: 26 October 2016
Payday loans are often used by people who need money quickly. However, although you may have seen commercials about payday loans, the advertisement may not have explained much about this type of loan. Here are a few questions and answers about payday loans to help you better understand them.
How do payday loans differ from most other loans?
Unlike loans that have lengthy terms for repayment, payday loans are provided for a short amount of time. Payment is generally due when you receive your next check from your employer.
Are payday loans usually provided for large amounts of cash?
Payday loans are not usually offered for huge amounts of cash. Instead, the lender offers an amount that can be easily covered by your upcoming paycheck.
Do you pay back a payday loan in small increments as you do for other types of loans?
Usually, a payday loan is paid off with a single payment. However, lenders may allow you to make payments on the loan's interest and rollover the loan balance. Still, if payment is not made on the agreed date, additional fees may be applied to the loan balance.
At the time of the loan agreement, you may be asked to provide your lender with a debit authorization or a predated check to pay back your loan amount.
What are the benefits of a payday loan?
The loan provides an easy way to obtain emergency funds if you have few other options, such as credit cards or a large amount of savings. The loan often meets an immediate financial need that you may not otherwise be able to pay, such as an expensive car repair or a pricey medical procedure.
How is the money provided to you from the lender?
The funds that are loaned to you may be offered in the form of a check, debit card, or cash. In some instances, an electronic deposit is made to your existing bank account.
How expensive is a payday loan?
Payday loans do involve a finance charge. Although the annual APR for a payday loan would be quite high, since the duration of the loan is typically only a couple of weeks, the short-term interest is usually affordable. Payday lenders sometimes assign a specific charge for every hundred dollars borrowed.
To learn more about payday loans and to determine the loan amount for which you may be eligible, consult with a payday lender in your local area. You can find lenders in your area by visiting sites such as http://www.paydayexpresscashadvance.com.Share