The Things You Need to Know About Payday loans

If you are a consumer, you might find payday loans if you’re looking for fast cash. These loans have been in use for many years and helped thousands of Americans with the opportunity to access the cash they may not have. The terms “payday”, “short term” and “high-cost credit” which are commonly associated with the payday lending industry, could be confusing.

The payday lending industry is an annual $80 billion company in the United States. The fundamental principle behind these businesses is to permit those with little amounts of money to pay high rates of interest (usually 10 percent monthly).

PaydayNow is among the financial companies that can assist you with payday loans. But, before you take an online payday loan from Here’s the essential information you need to be aware of about payday loans:

What are payday loans?

Payday loans are usually unrestricted, short-term loan that is available to those not able to pay their obligations to repay credit when they become due. Instead of borrowing funds from a bank or another lender that has fixed rates and terms payday lenders offer a short loan that is secured by the borrower’s next pay.

The client is required to pay back the principal of their loans, as also the finance costs, typically over the course of two weeks. What is the reason why anyone would take out a loan of this kind? It’s not logical. It’s the truth. 76% of the borrowers who are due to repay their loans in just two weeks will not be able to pay back the entire amount on that date. For many, payday loans are simply an opportunity to keep in the meantime until their next payment is due.

A large number of payday loan borrowers utilize the payday loan to cover essential items such as utility bills or groceries. The research shows that payday lenders have a lower likelihood to make use of their loans to purchase items than other kinds of loans. The payday loan borrowers take advantage of this method because they are unable to obtain credit elsewhere. They usually provide easy access to money for those who aren’t eligible for traditional bank loans.

Payday loans are available for those who apply

Payday lenders generally offer temporary loans to borrowers who are not able to get credit elsewhere. They typically offer smaller amounts of money usually less than 1,000. You can apply for loans online at the click of your mouse.

The borrower makes an individual check for the entire amount of the loan and then charges the lender. The loans are typically available for a period of a few weeks or several months. But, some lenders provide “longer-term” installment loans of several months or even years.

A typical payday loan is characterized by extremely high-interest rates, or an annual percentage (APR). It can range between 300% and 1000 percent. According to lenders, it’s an example that is “credit insurance” and lenders justify their high-interest rates by stating that borrowing money to pay for expenses, such as car repair or rent may be necessary when there is a crisis.

Important facts to remember!

The following are facts regarding payday loans:

  • Payday loans are easy to apply for. is much easier than the application process for other types of loans. The approval process is a much shorter time. Furthermore, no paperwork is required during the application procedure, as is the case for bank loans. Some lenders do not look at the credit score of the borrower as a requirement for granting the loan.
  • The majority of payday loans upon receiving their next paycheck. Rates of interest on loans such as those can vary from $10 to $30 per $100 borrowed. Most borrowers pay between $15 and 20 in fees per $100 borrowed.
  • The market is primarily comprised of unregulated businesses that are able to operate across state lines. This allows them to access millions of unaware customers who have no other choice than to take advantage of these costly loans. These lending practices typically make borrowers fall into a vicious cycle of debt.
  • Payday loans are only taken if you truly need to, and if you really need it. Instead, consider other options. In other words, you should not seek loans for extravagant costs!

If you’re considering the possibility to take out payday loans it is important to determine the amount you qualify for. Most of the time there is no limit to either the quantity or amount payday lenders are able to lend to individuals who need to borrow. Certain places, however, restrict the number of payday loans one can avail.

About Sam R. Flowers

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