There are some days that no matter how hard you try to control spending, unexpected bills come at you. There are some days that these bills present themselves in multiples, and your budgeted account cries out for help. Some people may have a savings account for emergency costs; others may have friends or family to go to. Moreover, there are those with good credit who have banks willing to help them out of a tough spot. By the same token, people are finding their way to a successful cash source through a payday loan. There is the convenience of online applications, no formal interview, and no relationship risk with them. Most importantly, one can steer overdraft and late fees away. Payday loans are a convenient and easy source of money help.
What exactly is an online payday loan?
An online payday loan is a short-term loan that is electronically-deposited into your bank account upon approval. This money is most helpful between paychecks when the funds you have are not keeping up with emergency costs. The cash advance goal is to get fast cash into your bank to cover impending costs so you can keep your finances in good standing with creditors. The money goes directly into your bank account, so there is no delay with making your payments. The cash advance total, including the fee for the loan, will be electronically debited from your account, usually scheduled according to your next payday. Your short term loan transaction is complete, and you have saved not only your credit status but kept additional fees from taxing your income further.
What is the cost of a payday loan?
Asking questions to the customer service representative from your payday loan company before you sign the loan is your best proactive approach to making the cash advance work in your favor. Ask how much the company charges and have them spell it out for you in actual dollars about the amount you want to borrow. If you need to borrow $150, ask how much you will owe when paying it back. Most companies will charge anywhere from $20-$30 per one-hundred you borrow. You can shop around and find a company that offers the lower of the scale.
What happens when you default?
Payday loan companies have their policies as to what happens when you default on the loan payoff. Ask questions before you get yourself into the loan. Knowing the consequences may be the added incentive to get your loan paid off in time or let you know that a payday loan is not right for you. Some payday loan companies offer payment options, but you will still want to know the program’s dollars and cents before you sign. Most cash advance companies are willing to work with you and your financial situation. Be responsible in your lending and courteous in your communication. If you do not pay your loan for some reason, it will be a matter of time before your payday loan ends up in the hands of an outside collection company. That’s when this short-term loan can affect your credit score if you don’t deal with it.
When in doubt, ask questions
Having complete information when you make decisions will empower your financial success. Payday loans work great in emergencies, but you will need future income to pay off your loan on time. Knowledge is power and having an incentive to pay off the loan on time is what makes sense. These short-term cash advances can be successful for people needing some help in a financial emergency. Again, use these cash advance loans for emergencies only. Exhaust all your options before applying for a short-term loan.
Bottom Line
Your payday loan company can work well to help those in a financial crunch. Choose one with a friendly customer service team who will answer any questions you may have about obtaining and paying off the short-term cash advance.
