Payday Loan Help

Payday Loan Help: Everything you need to know

payday loans help

If you really need money but payday is not yet around the corner and you don’t have any options, you will possibly think that applying for a pay day loan is the best alternative. Even if you are struggling with financial difficulties, payday loans are not the answer.

What is payday loan and how it works?

Payday loan is known as check loan or fast cash advance. It is a short-term loan where borrowers borrow a small amount of cash normally $500 but with high interest rate and they need to pay it on next payday. That is why they called it payday loan.

In order to get a cash advance or a payday loan against future paycheck loans, borrowers should write personal check and indicate the amount of money they desire to borrow and additional fee. After which, the borrower will receive the requested amount of money through an electronic deposit, check, cash or debit card. In exchange, the payday loan lenders will keep the borrower’s check until their next payday and they will deposit the check as fee for their loan.

On the other hand, many payday loan lender will not update their clients about their loans, because if the client fail to pay their loan on the given time the interest rate will become higher and other additional fees will be added. One of the disadvantages of payday loan is that the interest rate is begun to grow once they handed the money to the borrower. This is the main reason why financial institutions earn profits easily.

Payday Loan Help: Every borrower must know.

Although the help of payday loan is the only solution when bank accounts are empty and bills are in arrears, there are still several serious facts to acknowledge.

  • The borrower must reveal complex account information. There are several lenders, who requires account information in order to withdraw and deposit funds. Providing information makes you exposed to more financial issues.
  • A payday loan is a costly form of loan or credit. A payday loan is a costly form of loan or credit. If you are going to calculate your two weeks’ payday loans then, you will have to pay a yearly rate of approximately 400 percent. Unfortunately, payday loan APR is much higher compared to the most costly credit cards fee.
  • The borrower’s credit might be affected, if they don’t pay their loans on time.
  • Each state has different payday loan regulations that is why borrowers should familiarize their state’s rules and regulations before applying in any kind of loan.
  • Financial problems cannot be resolve in just only a week especially if the situation is very critical and that is why lenders grab this opportunity to roll over payday loans. Roll overs comprise fees and these fees are added on your loan.
  • The given time to pay payday loan is very short. A loan is commonly setup to resemble with your upcoming paycheck. Meaning the allocated payment period for payday loan is normally one or two weeks.

Tips on how to pay off your payday loans

People are still applying payday loans for some good reasons. No matter what their reasons are, there will be a time that they will experience difficulty in paying off their loans. Nonetheless, here are the following tips on how to pay your payday loans.

  • Talk to your payday lender

Talking to your lender personally, is the best thing to do when you can’t pay your debt on the given grace period. There is a possibility that will grant your request especially if you have a valid reason.

 

  • Consolidate payday loans.

Consolidating payday loans is possible but very challenging. However, payday loans can be consolidated in two ways.

  1. Consolidate using credit consolidation program.
  2. Consolidate through different financing source.

Payday Loans Alternatives

 payday loan alternatives 

  1. Personal Loan

Apply unsecured personal loan from different institution such as banks or credit unions. These institutions provide features like:

  • Installment option
  • Giving consideration when borrowers fails to pay
  • Limited renewal
  • No collateral requirement
  • No obligatory arbitration
  • Penalty fees
  1. Pay Advance

If you are working in a big company, some employers can offer paycheck advance. But in small company, you can approach the owner regarding cash advance. If they grant your request, you don’t need to pay for an interest since it is a cash advance.

Most importantly, don’t always rely on cash advance.

  1. Credit Counseling

This alternative is not an instant solution, however, credit counseling will help you on how to lessen your debt. Look for a credit counselor to start the developing process on how to budget your money and reduce your debt.

  1. Emergency Assistance

Some company provides emergency cash advance. Community organizations and local churches often give emergency assistance for car payment, utility bills and groceries.

  1. Cash Advance (credit card)

However, acquiring cash advance through credit card is not an ideal alternative. But compared to payday loans, this alternative is less expensive. It is also important that borrowers must be aware that some credit card businesses take advantage.

  1. Relatives and Friends

Borrowing money from your relatives can burden relationships. But if you only need a small amount and promise to give interest and pay after few days, then this is the right option for you.

  1. Online Options

Several websites offer loans, financial assistance, educational loans and they can reconstruct damaged credit worthiness (score). And these websites are cheaper compared to payday loans.

  1. Pawnshops

Pawnshop can be a credit source, especially if you own valuable things such as jewelry, land title and many more. You can use these as your collateral. However, the finances fee will differ by location.

Final thoughts

There are many possible options aside from payday loan. For sure, one of them is worth considering and can help to solve your financial problem. On the other hand, try to search for another option, especially options where money is not involved and loans with lower interest.

However, you can still handle financial problems without the aid of payday loans, by setting aside small amount of money for emergency savings. And if ever an emergency happens, then you don’t have to borrow money from payday loans.