There are many reports focused whether or not payday loan lenders target poor people. I’m sure there are some companies out there whose practices suggest those actions, but any company who follows state regulation guidelines and are responsible lenders will not be targeting this low income level. Spotya! Online Payday Loan is one of the responsible lenders.
The qualification process which Spotya! has set up, will only lend to those who earn at least $17k per year and then those customers would be limited to a maximum loan of $175. The fee on that amount would range between $17.50 -$26.50 depending on what state the customer lives in. Responsible online payday loan lenders will look for quality responsible people just like any other financial lender. Since the loans are set up to be paid short-term, the fees are added to the balance which are to be paid in full without interest charges around the time of the next pay cycle.
If you look at a payday loan in terms of cost, the fees are very cost effective when compared to how much you would pay if you did not get the loan. A bank will charge on average $34 for overdraft fees for each transaction which occurs until money is deposited into the bank. If it is a bounced check, you can be charged an additional fee if that check was deposited by the receiver. Wait till your next paycheck to make a payment to a creditor, and your balance will accrue a late fee. Credit card companies will charge $30 or more for that error. Too often, the fees for credit cards are larger than the minimum payment! Online payday loans work well in situations like these. The fees are less expensive and it keeps you in good standing with your bank and creditors. Take a loan out for only the amount you need so you can afford to pay it back with your next paycheck.
Payday lenders may bring in a few billion each year in fees, but in 2011, the banks collected almost $30 billion in overdraft fees. The astonishing aspect to this is that the banks created an overdraft protection plan to help make up for what they call “a loss in fee revenue”. Did you know you could pay for a service to protect you from overdraft costs? If you are one of the people who have many of these fees occur, it could be a cost effective program, but if you are someone who rarely lets your account go below zero, is it a cost effective to be paying for a service you many never use? Once you pay for that service, you may not be safe from additional fees. Some banks charge you extra if you use the service too many times, or if the bank has to cover a larger overdraft, they may interpret that money as a loan which you will be paying interest.
Credit card companies offer cash advances as an alternative for quick cash, but you will want to read the fine print on this transaction. Annual percentage rates are much higher for cash advances, so don’t assume this money will be treated the same as purchases. A cash advance will be added to the balance, but treated differently and this amount will be the last to be paid off. Purchase balances will be paid down with your monthly payment and once those are paid off, your cash advance will be paid. This allows the credit cards to continue charging higher interest each month. If you have a large purchase balance, you could be paying a very steep price for obtaining a cash advance from a credit card.
Financial companies do earn money from lending and handling your money. There are companies who charge more so do your shopping and find the best lender for your situation. Online payday loan lenders are access to fast cash to be a cost effective solution to your financial situation.
I am a Blogger, Web Content Writer, Teacher, Mom. A woman of many hats. As an elementary teacher, I had always encouraged my students to write more. I find myself falling back on my own teaching techniques to share what I know about building and rebuilding personal finances.