Fast Payday Loan – Facts You Cannot Afford to Ignore

By | 01/04/2019

There is nothing like a fast payday loan to get you through that emergency when you are broke and have no choice but to wait until your next paycheck. Yes, these loans are fast – they are convenient. But are they the best option? Getting stuck in a financial crunch is a regular situation for a lot of people and this has contributed to the proliferation of lending companies. Which brings us back to the question – are cash advance loans the best option? Yes and no, because while it works for some as a short-term solution, for others it can become a dangerous habit. It seems like the easiest thing in the world to keep adding up these loans until you suddenly discover one day that you are deep in debt. Sadly some people even con themselves into looking at these loans as an alternate yet steady means of getting their hands on ready cash.

Any sensible person will tell you that paycheck loans are best used as the last resort for a rare emergency. But sense is the last thing on the mind when it is clouded by the worry of how you are going to raise cash for, say, a medical emergency, urgent repair work, paying off overdue bills – all of which are expenses that can hardly wait.

This brings us to the lenders who offer cash advance fast payday loans. The concept is simple – a small loan limited to a few hundred dollars that can be covered by your paycheck, which is just a few days away. Of course, you have to pay a fee for the service. So far, so good. Philanthropy does not feature high on a lender’s priorities. The business looks at high profits. Lenders charge exorbitant interest rates. Unfortunately, the whole idea of a short term cash advance is so attractive and addictive that habitual borrowers can seldom resist the idea. It is not as if the borrower does not know that interest rates ranges from a mind-boggling 400 to 800 per cent annually. Because the loans are short term, it does not seem all that scary.

When you do get into an agreement with a lending company, you are expected to repay the loan on the due date. Some people plan it accordingly and clear their payments. A majority of people tend to ‘roll the payments’ where a part of the loan is cleared off. What remains attracts a new rate of interest.

The entire situation builds up as the fast payday loan becomes complex and bigger. Some lenders get you to sign a wage agreement where they have access to your pay. There is every chance that the lender can pull you up for fraud in case you have issued a check but do not have enough funds to cover the check. This can result in fines ordered by the court or even imprisonment.

The best thing to do, then, is to take stock of your situation when you think you must approach a lender for a cash advance. There are situations that could be out of your control, but it is also likely that you did not plan your finances properly. If you do not work with a budget, now is a good time to make one. Tighten your expenses to only what you need, so that you can start thinking of clearing payments. For all you know, you might actually have other options that are a lot safer than these short-term loans. Let’s say you can buy a little time – in such a situation, you can even consider borrowing from your 401K plan.

Source by Albertina Belmont

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