Payday Loans: A Last Resort

When you don’t have any money and you need some fast, payday loans may be your only option in NC. The advantages to these kinds of loans are that they are available for just about anyone who has a job or other source of steady income and that they are fast. Additionally, you won’t need any collateral to secure one.

Typically, these loans are small and should only be used for emergencies. Most payday loan companies won’t lend you any more than 80% of your average pay, and you are expected to pay your loan back, with interest, on your next payday. The interest rates on these loans are quite high. The 10-14% interest on a typical short term cash advance ends up being the equivalent of about 300% Annual Percentage Rate.

Needless to say, most people don’t take out these kinds of loans if they have other options. If you can borrow money from the bank, a friend or relative or just about any other legal source, you’re better off doing so. But if your credit is hard up, a payday loan is an acceptable option as long as you don’t get in the habit of reloaning.

Reloaning is basically borrowing the money again, with another round of interest, until the next payday. The problem with this is that if you add it up, it doesn’t take long before you’ve paid more in interest than you borrowed in the first place.

Here’s how it adds up: Let’s say you borrow $300 with a 12% interest rate. That means you have to pay back $336 on payday. If you pay it off and walk away, you’re only out $36, which may be worth it in a tight spot. But if you reloan, you’re paying the company $36 every payday. Assuming you’re paid biweekly, that adds up to paying more than what you borrowed in just a little over 5 months (18 weeks). You may say that there’s no way you’ll still be borrowing for that long, but believe us, it can happen. If you do have to reloan, at least make sure to pay the loan down a little, borrowing less every time.

Most states have laws in effect that will allow you to pay off your payday loan in installments if you find that it has gotten out of hand for you. Be aware before you do, though, that it could affect your ability to use payday loans in the future. That said, though, it may be better than continuing to pay interest payday after payday.


Know Your State’s Payday Loan Laws

If you’ve found yourself in the unfortunate position of needing to take out a payday loan, knowing your state’s laws can save you a ton of hassle and money. Most states require lenders to make borrowers aware of applicable laws, but all too often, lending agents skim over important details, or don’t mention them at all. Legally, as long as they have your signature and initials on all of the documents, there isn’t much you can do to prove they didn’t share pertinent information with you.

It’s not difficult to dig up the laws in your state concerning payday loans. Check here for a state by state rundown of the current laws regarding payday loans. The regulations are explained in simple, layman’s terms that just about anyone who reads this article should be able to understand.Know Your State’s Payday Loan Laws

Many states have caps on how much interest lenders can charge, and several others have provisions which allow for borrowers to get out of the cycle of reloaning by choosing to pay the loan back over a set period of time, more like a traditional loan. Of course, some of the lending companies will refuse to lend to you again if you do this, and this is their right. But, at least it offers you the opportunity to get out of a bad situation before it really gets out of hand.

Some states have outright banned payday loans, and others are considering legislation to do so. You’ll have to decide whether or not you think that’s a good idea. Our take is that regulations and limitations are necessary to keep some semblance of fairness in the payday loan industry, but outright banning them can also be harmful to people who need them: mostly the working poor when they are faced with an emergency.

It’s never a good idea to take out a payday loan that you don’t absolutely need. While the companies will advertise the loans as a great way to pay for a vacation, have extra spending money, or any other number of frivolous uses, common sense will tell you that paying high interest rates on a short term loan is a really bad idea except in a genuine emergency

Even then, you should pay off the payday loan right away. If you can’t afford to pay off the payday loan in one payday, you should really ask yourself if this is truly a matter of life or death. And if it isn’t, skip the loan.


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Excellent choice if you need of money very fast.


Lenders Respond to Critics of Payday Loans

This week has seen payday loans come under criticism from debt advice groups who claim that some companies are charging excessively high interest rates on this type of loan. The debt advice groups are calling for a cap on interest rates for payday loans however, the Office of Fair Trading (OFT) responded to this by stating that payday loans would be covered by investigations of the issue of responsible lending and that although the loans, often used by people to tide themselves over until they get their wages, generally attract high rates of interest, the businesses offering them are properly licensed, professional and responsible.

U.S. payday loan providers also responded to the criticism by explaining that higher interest rates are levied on payday loans to reflect the level of risk being taken by the lending companies.

As one would expect, the payday loan companies claim they are providing a valuable service to customers who may be unable to get credit elsewhere. However, this claim is supported by the rapid rise in popularity of the products offered by the payday loan companies as they provide a real alternative to unauthorised overdraft charges, pawnbrokers and loans from friends or family.

Payday loans do not involve a credit check and for this reason they are sometimes referred to as bad credit loans. No credit check means that these cash advance type loans are therefore available to those who are unable to get other forms of credit such as credit cards, traditional long-term loans or overdraft facilities. The loan companies do however require proof that the applicant is currently employed and that their next pay cheque will be more than sufficient to repay the loan in full.

Many payday loan customers report that by getting a payday loan they are able to resolve their immediate cash-flow crisis and buy themselves a little bit of breathing space in which to assess their finances and to get advice on how to manage their money better.


Benefits And Cautions Of Payday Loans

Although credit card debt is high in most countries of the world, people are still hesitant to take out personal loans or other short term solutions to their financial crises because of fear of creating greater debt problems. These fears are very valid, but a solution may be the option of payday loans that allow access to money quickly but repayable over a very short period of time.

Most countries of the world have financial institutions that allow these loans to be taken with limited paper work and almost immediate access to funds. The repayment rate can be within a period of approximately 6 weeks and generally are designed to assist an immediate cash need until the next pay day is due. Hence the name payday loans. The very short repayment terms provides the ability to budget the repayments and the interest rate without fear of unexpected other bills or cash needs interfering with the ability to repay the loan in the contracted time frame.

The key to taking a loan responsibly of any type, long, short or pay day is to plan before you take the loan out and not to act on impulse. Consider very carefully your ability to repay the loan and do not create problems for yourself to take out and over commit to too many loans.

If you find yourself in financial stress, if possible seek professional advice from an independent financial expert before you use one loan to repay another loan. In some States of the USA there are now restrictions on how many loans an individual can have at any one time and working within these guidelines may provide the help you need to access a loan repay it and not find yourself in more financial stress.

Payday loans are very easy to access and offices are usually located conveniently as are the online access points. They are secure and require little information of a sensitive nature and therefore most people who apply for them regardless of their financial and personal status can access them.

The requirements to be approved for a loan are fairly similar in most countries. You must have a bank account, a regular income and be over a certain age and a citizen of the country you are applying to for the loan.

Anyone who meets all these requirements will be approved for almost immediate access to money paid directly into their bank account and usually within a few hours of approval.

The repayment options for the loan usually require repayment at the time the next pay is due with an interest fee payable at the time the loan is repaid in full. If an individual can not repay the loan, there are added charges incurred.

These type of lendings are a valid and appropriate solution to cash flow needs, but must be responsibly and carefully managed. Plan and project needs before you apply for a loan, appreciate the benefit of repaid debt and focus on repaying the loan in the contracted period.


Payday Loan Approval For Many

Payday loans are becoming the solution to a short term cash flow crisis within the family budget. With so many people finding the current economic times tough, most people will at one time or another find themselves needing fast cash. Access to credit that is quick and simple and can pay a bill or purchase an item with very few people being rejected for them regardless of their life circumstances.

In the United States, many financial institutions are offering access to the loans. Although banks still may have extensive credit checks to provide eligibility for longer term loans, the institutions offering short term loans have minimum requirements for fast approval. These requirements include a minimum monthly income; the person must be over 18 years of age and a USA resident.

Having met these conditions, payday loan lendings are approved for the majority of people immediately and access to money is almost instantaneous once approved. The convenience and speed of processing are making these loans popular throughout the world. Each loan company have a different criteria as to how much can be borrowed and the repayment terms. If you are considering finding a suitable loan to assist you in your current circumstance shop around to find a loan option that suits your budget now and for the period of the loan.

Perhaps the most important consideration is the pay back terms of the loan. Check how long you have to repay the loan, the rate of interest and any interest fees to be paid at the completion of the loan.

Balance these costs against your budget, to ensure you can pay all your expected bills on time. Failure to do this, will only lead to further distress later. Careful planning can make a pay day loan a viable and workable solution for your current situation.

There has been a lot of discussion on the high interest rates of the lendings and these concerns are valid without the planning and budgeting that is essential before you accept a loan offer. In the short term however, the higher interest rate is actually less of a cost than a longer term loan on a lower interest rate, because the amount repaid over the extended period of time is actually higher than the short term high interest.

If you have a bad credit rating, short term lendings paid off quickly and within the loans terms usually around a 6 week period, can result in an improvement in your credit rating.

Payment options in the USA for a loan payout Is via a bank account and many banks prefer but do not require a debit card option. Some ID is also required and all lending institutions stipulate what they will accept as appropriate ID. The application can be done online and once an ID is verified and the loan is approve, the cash can be in the bank and available within a few hours. Repayment terms are then immediately binding. All transactions are secure and privacy maintained at all times.