Category: PayDay Loans
Living on paycheck can present challenges, especially when instant cash is needed in situations that really can’t wait until the next pay date. Running out of cash is not uncommon, but when an emergency arises, you will need that boost and sometimes it can be hard to get. This is where payday loans come into the picture to rescue the situation. They are quick loans that offer short terms financial support until the next paycheck.
The payday loans come with varying repayment terms depending on the provider you settle for but the truth is that you are most likely to pay back in a as little as two weeks. They of course can be paid in installments and they do attract interest. The total amount you can enjoy from the loans can be determined by your salary and the financial situation you may be in. They have become very popular, but the least you can do before going for one are getting familiar with the benefits and the risks involved when taking them up.
Payday loan benefits
- These loans come in handy in emergency financial situations and they are quite discreet. You do not have to worry about your close friends and family knowing about your financial crisis when you can easily access the payday loans discreetly.
- The loans can be enjoyed with any collateral requirement. All you need to do is fill a simple application form for an evaluation and you qualify for a reasonable short term loan. You can actually enjoy no credit check payday loans where the lender does not rely on your credit history to give you the financial assistance you need. As long as you have a salary to repay the loan, you qualify for it.
- The loan processing is quick and easy so you can access the money when you need it most. You do not have to worry about long loan processing processes when dealing with the short term loans. Sometimes it may only take a few hours for your application to be approved and for the funds to be channeled to you. This is something you really can’t say with bank loans.
Payday loan risks
- The loans do not offer ideal cover for long term financial issues. They are most suitable for urgent fund shortfalls for working people and relying on them continuously may mean more financial trouble for some.
- Since the loans do not require any collateral or a good credit history, they tend to come with very high interest rates. If you are not very careful when choosing a lender, you could end up with a loan that is just too challenging to repay.
- They can affect credit score when you are late on a payment and incur penalties. Some lenders may not require a clean credit history, but these are loans and failing to adhere to repayment can impact your credit score negatively. It is something that can affect access to funding even from banks and other institutions in the long run.
When looking for a payday loan, it is important to first evaluate the financial crisis you are in to determine whether the short term loan is what you really need to fix it. Sometimes you may need some serious expense changes to fix your need for funding. It is most advisable that you stick to the loans only when it is absolutely necessary to get one and when it is the only reasonable financial solution at that present moment. Take time to compare lenders to get yourself better loan and repayment terms that suit your financial status.
Payday Loans often termed as Salary Loans or Cash advance loans are short term loans, relatively of small amount provided with the assurance to be paid back as soon as the borrower gets his salary or payday. Payday loans are generally for the time period of one or two weeks, as they are borrowed for instant need of money and are to be paid back after the next wages arrives. Borrowers need to provide a postdated cheque of the amount to be paid to the lenders. If on the very particular day the cash amount is not received by the borrower, the lenders are eligible to deposit the cheque in their respective accounts, which in case if bounces can result in a hike in the paid amount because of the cheque bounce penalties together with the effect of notice period being over. Borrowers can also use electronic mediums to receive and pay the amount.
Who are eligible to get payday loans?
Borrowers need to have a bank account and a steady source of income with their identification ids to get a payday loan, that ensures that the person is trust worthy enough to pay the loan amount back, as he is employed and earning.
The payday loans are provided either by some payday loan store or the stores providing other financial services. In order to prevent the unreasonable and excessively high rates of interests over these loans by lenders, some jurisdictions limit the APR i.e. annual percentage rate that any lender can charge.
Payday compensation and refund
In some cases, the payday loan proves to be load for life, as it can reach to an extend where it becomes impossible for you to repay the whole amount you borrowed as the amount becomes unaffordable. This case generally arises when the interest rates are getting higher and higher and you are unable to pay the final amount every time. The amount generally becomes unaffordable when the only way to pay it, is to take on another loan. Sometimes the company is responsible for the situation as it provides loan to a person who already is trapped in other loans, or is not in suitable financial state, in such a case, the person can ask for a refund or compensation, after proving that the company didn’t treat him fairly. Treating unfair means suggesting wrong ideas, plans or schemes, that took the borrower at a stage where he is all surrounded by financial crises.
The borrower can prove the company was responsible for the amount getting unaffordable status for him, as it lend the loan, even after seeing the bounced cheque records, and the financial state of the borrower, the amount is now that large that it consumes more than half of his income, making it impossible for him to repay. The borrower hence can ask the compensation or refund of the amount.
The question arises now is what amount should be claimed for compensation, this totally depends on the current situation. Was it totally clear to the lender that the amount is becoming unaffordable to the customer, and if it was so then why was the lender still lending money. The amount after which the loans lend were becoming too high to get paid back by the consumer should be refunded or compensated.
Though the customer isn’t likely to get the whole amount refunded, but he can ask as much he can, and let the justice decide further. The customer first can simply ask for removing the unaffordable loans from his credit account, and a refund of all the interests he paid.