The American economy, although beginning to bounce back, is still not as healthy as it once was. Many people consider themselves lucky to still have a job but with the price of just about everything going up, except wages, it is extremely difficult to save for the proverbial “rainy day.” To help people who find themselves in need of quick cash, payday loans are available both through conventional brick and mortar shops as well as online.
There is no doubt that, if used improperly, that instant payday loans are an expensive way to get quick cash but the greatest majority of consumers is well aware of this and pay the loan back quickly. These types of loans are priced at a fixed fee amount which of course can be converted to an APR which they are, the interest rate is made known to the consumer upon approval.
How do instant payday loans work?
There is no secret to these short term loans, let’s take an example. If a person’s car should break down and they need the vehicle otherwise they may jeopardize their job, they need to get money for the repairs. Assume the repair cost is estimated to be $300; the borrower, once approved, gives the payday loan lender a post dated check in the amount of the loan plus the fee, the fee is on average $15 per $100 borrowed. You give the lender a check for $345 payable within a short period of time, usually no more than 14 days. When the time period has elapsed you can let the lender deposit the check, pay the lender cash and retrieve the check or arrange to roll all or part of the loan over which means you write another post dated check.
Who might use instant payday loans?
To avail of a payday loan the borrower must have a steady job and a checking account. The majority of those that avail of payday loans do not have savings or credit cards. These types of loans do not require that the borrower be subjected to a credit check, which makes instant payday loans an attractive alternative for those with poor credit.
Benefits:
Instant payday loans are good when there is a need for emergency cash and the borrower does not have savings. These loans can be used for urgent medical care, car repair or other immediate need. It must be stressed that payday loans should not be used for anything other than urgent needs, do not use a payday loan for an unnecessary purchase.
Instant payday loans are ideal for those with poor credit and in need of emergency cash.
