It is estimated that there are well in excess of 20,000 companies that offer fast cash payday loans, many are located in local malls while many others offer online services. Just what is a payday loan and is it something that may prove beneficial?
Like any financial transaction the individual involved should enter into the arrangement full aware of the terms and conditions. Payday loans should be used with caution and it is important that the lender be able to repay the loan back as agreed on his or her next payday. Fast cash payday loans are normally for small amounts, often less than $500, they are offered at a set fee which equates to the finance charge the borrower accepts. The loans have a very short term, usually two weeks, the fee charged for the loan varies but $15 per hundred is the norm. When the borrower accepts the loan and the terms he or she is required to either give the lender a post dated check drawn on a checking account or to authorize the lender to debit the account automatically.
How does a fast cash payday loan work?
To answer this question it is best to cite a typical example. Suppose you use your car as an integral part of earning your income and suppose the car breaks down. If you have the cash available to have it repaired that is good, if not you have several choices; one choice is to leave the repair until later in which case you will jeopardize your income, the second choice is to get the cash from a payday lender.
Assume the repairs total $300, the lender gives you this amount in cash; you give the lender a check in the amount of $345 based on a fee of $15 per $100. If you apply for the loan online you give the lender access to your account. When the two weeks is up, the loan becomes due; you can either let the lender deposit the $345 check or you can write another check for the original amount plus fee plus an additional fee.
Who would use a payday loan?
Any applicant that has a steady job and a checking account can apply for a fast cash payday loan. In most cases the borrower is someone who does not have a savings account or access to a credit card. These types of loans do not require a credit check so anyone that is currently suffering credit problems will often turn to this source of cash in an emergency situation.