A French Proverb says, “Borrowers can’t be choosers.” and Ken Alstad said, “Laugh when you borrow and you’ll cry when you pay.” Take heed to these nuggets of wisdom before you borrow.
What Is a Payday Loan?
A payday loan is usually money loaned to a person for a brief, short-term period. The interest rates run from 100 to 500 percent compared to most credit card rates (10-20%) car and home loans (3-10%) Payday loans are risky, unsecured loans. You pay back this short-term loan on your next payday or within 4 weeks. installments are not used and it may take 2-3 days to actually. If you don’t pay them back on time, you are charged fees. Many people are forced to take out additional loans from companies of the same caliber just to pay back the original loan. Additionally, many clients have to leave a dated check with the payday loan company as to quickly get their money.
Who Gets Payday Loans?
Usually people who get SSI, disability or low paying jobs get payday loans. People who receive alimony, child support or even a trust fund may use this type of advancement.
They generally need it for an emergency or don’t make enough to pay existing bills. If your credit report is spotty, or you have no credit at all, an individual might opt for this type of loan. You don’t have to be employed, however you must prove you can pay it back in two to four weeks.
Qualifying for these SSI payday loans is not a rigid process. Applicants must prove they are a Unite States Citizen with a passport or government ID such as a driver’s license, a bank account and documentation of income or benefits or a pension. Additionally, those persons receiving alimony, child support, and self-employment can apply too. The ability to show some type of consistent, steady income is needed. Consumers must be honest with themselves when you borrow money from any institution or person. Perhaps before you borrow make a solid plan.
How Do you Pay back a Payday Loan?
As mentioned before, many clients write a post-dated check or money is debited from your account. Just like any other loan, borrowers need to investigate and research what they are accepting when they sign on the dotted line. The turn around time is short, but the fees for a late payment are costly. Remember, payday loans are not allowed in every state. Some states don’t like the high rates to borrow money for such a short period of time. Being aware of the highs and lows of payday loans is necessary before you get it. A smart borrower does their homework.