Payday Lending Loan

Payday Lending Loan

If you are looking for a payday or short term loan, you are in luck. These days, these types of loans are easy to find online, easy to apply for and they fund quickly. They can give you the money that you need to get bills paid on time, to pay for emergency expenses or to just deal with the unexpected.

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What Can You Use Your Payday Loan For

You can use your payday loan for any purpose that you want, however, you should be careful. These are high interest loans and should really only be used for emergencies. Are the lights about to get shut off? Do you need a new alternator for your car? These are good reasons to get a payday loan. Do you want to go to a concert? Need money for a weekend vacation? These are not good reasons to take out a payday lending loan.

In addition, before taking out a loan, even for the right reason, you need to think and plan. Can you pay back the loan on time? What cuts do you need to make to your budget to make this happen? If you know that you would be unable to pay back a loan, do not take it out, you would only be making your problem worse.

If you find yourself in a position where you have taken out a loan and can not pay it back you may have options. Some states mandate that lenders must convert the loan to an installment loan. If this is not an option, your lender may have options for you and you should contact them as soon as possible.

Must Know Facts About Payday Lending

  1. Effective interest rates are high.
    Interest rates can be very high on these types of loans because you are typically paying set fees instead of an actual interest rate. When you take the fee and factor in the short term of the loan, usually just two weeks, the effective APR is high. This is just the nature of the beast, but something you need to consider. Make sure that the cost of the loan is less than any fees or penalties that you would pay without the money.
  2. Loan Amounts are limited by the state.
    The amount of money that you get is limited by the state. They limit payday lending so while someone in Texas might be able to get an $800 loan, someone in Nebraska would be limited to a $500 cash loan. It can very quite a bit, so check your state statutes to see how much you are limited to.
  3. You should use payday lending loans as last resorts.
    Look for other means of funding before you commit to them because other sources will probably cost you less. Check with friends, family, look into a credit card limit increase, etc. If you are creative, you can find many ways to come up with the money that you need. If you have a bit better credit, consider getting a personal loan quote which will have lower interest in most cases.
  4. Never borrow more than you need.
    These are not loans that you should use to give yourself an extra cushion. Get just what you need to pay that bill or expense and nothing more. The more that you borrow, the more that you need to pay back and the more the fees will be. It also goes without saying that you should not use these loans for luxury items.
  5. These are loans that you do not need good credit for.
    If you had outstanding credit, you would probably have other income source anyway. Bad credit does not disqualify you from one of these lending sources. This is why the payday loan is often the only source of emergency money for some.
  6. If you do not have a checking account, you are probably out of luck.
    The loan providers will deposit directly to and withdraw directly from your checking. This makes it convenient for you and them and is also a way for them to better insure that they will get paid. Savings accounts, in general, do not qualify you for a loan.
  7. How Do I Get A Loan With Bad Credit?
    With a payday loan, you mainly just need good contact information, a checking account and a source of income. This is how you get a loan with bad credit.

Alternatives To Loans For Bad Credit

Before taking out a loan, you should know that you may have other choices. Choices that could potentially save you some money. Here are a few of the options that you might have.

  • Negotiating with creditors.
    Some of your creditors may be willing to allow you to skip a payment or perhaps just make an interest only payment. Your creditors do not want to see you get behind and default on an obligation. It would just cost them money in collection costs. To save money, many will work with you.
  • Borrow from acquaintances.
    Friends and family are a great source of interest free loans. If you have the chance to borrow from a friend or family member, take it. Even if you can not borrow the full amount that you need, borrow what you can this way. Then you can take out a lesser payday lending loan and pay less fees.
  • Employer loans.
    Many employers will advance you money from your next paycheck. This is rather risk free for them as you have probably already earned the money that you will be borrowing.
  • Sell property or valuables. 
    If you have something that you can do without, why not sell it and get the money that you need. You have lots of venues to use to sell your items. You can use eBay or Craigslist or even have your own garage sale. If you go the garage sale route, make sure that your city does not require permits. Many require them to have a garage sale, don’t risk a fine.
  • Credit card advance. 
    If you have some balance on your credit card, a credit card advance can be a great alternative to a payday lending loan. The interest, although high, will probably be less.
  • Doing without.
    If you can do without something, it would be best to do so. A high interest loan should not be used unless it is absolutely necessary.
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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.

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