Payday Loans

Payday loans can come in handy for those who need an advance from their paychecks. These loans are easy to get but can have high interest rates. The high interest rates aren’t so bad if you pay them off in time.

Payday loans have been around for many years and are meant to be short time assistance for you between paydays. They are meant to be used one time and then paid off in full. This is the way that many people have used them.

There are many places where you can get payday loans, lenders are on just about every corner. You can get rimelig, or reasonable loans online, as well. You just need to be careful and choose the right lender.

This article will help you to learn more about payday loans and how to use one responsibly. It will give you some tips on how to use them. You can also do research and find out more information on your own.

How Payday Loans Work

To get one of these advances, you must either go to the lender in person or you can go online. The application is a simple process and can be done in just a few minutes. The amount of money that you can borrow differs from state to state, but the most common amount is five hundred dollars.

There are basic necessities that you must have in order to get an advance. These include being an adult that is eighteen years old or older, a form of identification that is valid, proof of income, checking account that is open, and your phone number. This helps the lender to make sure that you are who you say you are and that they can contact you when needed.

When you go into the store to get the loan, you will need to have a personal check that you will write out to the business. You will write it in the amount of money you want to borrow plus any fees. If you are getting an advance of $500, you will write the check for $575, the $75 being interest and fees.

If you apply online, you will give the lender your banking information and give them authorization to draw the money from your account. You will give the same information that you would give them in the store. The money that you borrow will then be placed in your account almost immediately.

Once you have borrowed the money, you will have to pay it back on your next payday. Most states allow you to renew your loan if you don’t have the money and can only pay the fees. Some states don’t allow this, so you must pay it in full on your payday.

They Can Be a Bad Idea

Payday loans can be a bad idea if you are not capable of paying them back in full without having to renew them. They have high interest rates and can get you caught into a web of constant renewing if you aren’t careful. Other fees from your banking institution can also pile up if you don’t have the money in your account to cover the loan.

Why You Would Want a Payday Loan

Many times, payday loans come in handy when it is time to pay the bills. There can be cases where you didn’t budget correctly and need a little extra to pay those bills. Other emergencies also come up, such as car repairs or major appliance repairs.

These are the perfect times that you need to have an advance. These advances will help you to get through the tough times and you can pay them back on your next payday. This will help you to keep your lights on and get other emergencies taken care of.

This works best if you can repay the advance without having to renew it. You will be able to use this option again in the future if you have paid it off. You don’t want to use it every month if you can help it.

These loans usually aren’t reported to credit bureaus unless it is reported to collections. This can have a negative impact on your credit report and can lower your credit score. This is another reason that you need to pay them off on time.

Laws and Rules

There are laws and regulations that all payday lenders must follow. The biggest one is the Truth in Lending Act, which says that the lenders must be upfront with the amount of fees that you must pay. This says that they must show the dollar amount of the interest fees before you sign the papers.

There are other laws such as the Payday Rule which is trying to put more restrictions on the loan industry. This regulation requires that the lender do affordability tests and limits the number of rollovers that a customer can do. The payday lenders are against this regulation and are fighting it because they know that borrowers are in great need of this service.

Many of the borrowers that need this service are military members. There are regulations in place to protect these borrowers, as well. Since over forty percent of borrowers who use this option are military personnel, there is a restriction of how much interest they can be charged. If you are a military member, you can only be charged up to thirty-six percent interest.

Car Title Loans

Car title loans are similar to payday loans in that they both are short term solutions to an emergency need. Car title loans are different because you must hand over your car title to the lender. Your car may be repossessed if you do not pay your loan on time.

You need to provide the same information to a car title lender that you would for a payday loan. You will need to show a valid proof of identity, proof of income, proof of insurance. You will need to keep valid insurance on your vehicle for the time of the loan.

Unlike a payday advance, you will have to pay the car title advance in monthly payments until your loan is paid off. The lender usually expects you to have it paid off in about a year, sometimes less. These payments can be more than twenty percent of the amount of your loan each month.

The interest rate on these types of advances can be similar to other advances at about three hundred percent. Title lenders also add other fees to the advances such as processing fees and origination fees. This can make your monthly payment even more costly.

These advances are good for bigger emergencies that you might have. If you have an emergency and need major car repairs, a title advance might be better for you because you can borrow more money. These are also good for other larger emergencies such as paying off other debts that are threatening legal action.

Conclusion

Payday loans can be a necessary part of your life, especially if you have a lower income. You might need them to make sure that you can pay your monthly bills such as electricity and water. If you need these on a regular basis, you might investigate getting a side job because they can get expensive.

These loans can be very important if you are facing disconnection of your utility bills or other small emergencies. You just need to remember that you need to be able to pay them off in full on your next payday. If you can’t, you will be forced to rollover the loan and pay more interest fees.

If you have a larger emergency, such as major car repairs, you might investigate a title loan. You can get more money, but you will need to give the lender your car title to get the advance. You can make monthly payments on these advances, until they are paid in full, and you get your title back.