This is part two of a series of articles regarding payday loans, and addresses a number of the most common questions people have about payday loans or cash advances (also known as “paycheck loans”, “pay loans”, or “faxless payday loans”). These types of loans should only be used in situations where you have no other reasonable alternatives. For example , if you have a financial emergency, and need short term cash, these types of loans can be a good option. However , make sure that you will be able to repay the loan on the due date, or you risk high “rollover” or “renewal” fees and can run into a never ending cycle of payday loan debt.
What is a payday loan or cash advance?
Payday loans or cash advances (also called “paycheck loans” or “cash loans” are short term loans made by specialty lenders. They are called “payday loans” because the loan is usuall designed to be paid back on your next paydate (usually 7-30 days after you receive the loan funds). The funds you get from one of these loans can be used for anything you want, there are no conditions on use of the money. Payday loans are very common because they are very easy to get. The loan application process is designed to be very quick and easy. In fact , many lenders allow you to apply over the phone or on the Internet. An Internet cash advance application usually takes a few minutes to fill out, and you usually receive confirmation of whether you are approved (and for how much) in seconds. The amount of money you can borrow depends on how much you make each pay period, and, in some situations, what State you live in. The amount of interest will vary according to the amount of money borrowed. There is no credit check involved and payday lenders do not report to a credit agency.
Will they loan me money if I am drawing worker’s compensation or an SSI check?
Most payday loan companies will let you borrow money if you are receiving a SSI check. The problem may be if you are drawing a worker’s compensation check. Those tend to be less stable and many companies will not allow you to use them as income. You will have to ask the customer service agent to be sure.
What is the interest rate for a payday loan?
The interest for payday loans are quite high. Most payday loans businesses charge up to twenty-five percent for a two week loan. You can see how quickly the interest charges can add up if you must continue to borrow money from the payday loan company. Check the paperwork for that business to see the accurate dollar amount that will be charged for every hundred dollars you receive.
What happens if I don’t have the money to repay the payday loans?
That would be a big “uh oh” because they want their money back. The most feasible solution, and one used most often, is to take out the money loan again before you attempt to pay bills. Some people find they cannot afford to pay back the entire loan so they simply borrow again, but at this time a lower amount of money. This gradually pays down the loan until they can finish paying it off. The big problem comes when you do not have enough cash to pick up the loan note and take it out again. If this is your situation you will need to talk to the loan company immediately. Some may be able to work out a deal with you to pay another week’s interest until you get the money you need.