Offering quick access to credit facilities, payday loans can save you from serious financial issues. With payday loans, you have credit facilities that can solve all your financial needs. So, don’t let any financial crisis pin you down. You deserve to be happy. Apply for a payday loan and live life nonstop. But what are payday loans? How can you secure one? Well, this article is going to delve into the topic and help you understand everything about payday loans. Keep reading!
How to Secure a Payday Loan
Also known as cash advance loans, payday loans are unsecured credit facilities. These loans are normally issued on a same-day basis. Payday loans are not secured. This means that you don’t have to present security to get a payday loan. All you need is to prove that you are employed and can payback. Also, an active bank account is required.
According to research, more than 12 million Americans apply for payday loans ever year. And this amounts to over $9 billion in loan fees.
But while payday loans might provide borrowers with the emergency cash they need, there are several risks you should be aware of:
High Annual Percentage Rates (APRs)
If you borrow a two-week $500 which charges $15 for every 100 dollars you borrow, for instance, it means that you’ll be required to pay an annual percentage rate (APR) of almost 400%. And according to CFPB, this can be extremely costly.
Short Repayment Terms
Payday loans are often repaid within 2 to 4 weeks of the initial loan. And this could feel quite overwhelming.
If you aren’t able to repay your payday loan within a short amount of time, you may get hit with additional fees. And those fees start piling up if you roll the debt over, or continue re-borrowing. According to the CFPB, nearly a quarter of the initial payday loans are often re-borrowed over nine times.
Can’t Improve Your Credit Score
Borrowers who’ve poor credit records might not be able to access loans with better terms. However, payday lenders don’t often report your payment history to the credit bureaus, meaning that the loan isn’t helping you build your credit score.
Payday Loan Alternatives
Although payday loans might seem quick and instant, there are several other options that can provide reliable financial solutions while also keeping you out of a debt cycle. And these include:
Are you a member of a credit union? Well, this can help you access affordable personal loans. Federal credit unions might also offer “payday alternative loans” to its members for amounts ranging between $200 and $1,000. And these typically come with an application fee of $20 or less as well as APRs of no more than 28 percent.
A debt settlement might affect your credit but it could also help you resolve your debt and start all over again.
Emergency Personal Loans
This might come with greater interest rates as well, but if you seriously need a loan and don’t qualify for cheaper rates, it’s important that you do some comparison shopping. With these types of loans, you might qualify for a better rate and longer terms than those offered by storefront payday lenders.
You should always look for a creditor who reports to the major credit bureaus. Remember, a positive history of on-time loan payments can go a long way in improving your credit score so that you can eventually qualify for loans offering better rates.
In certain states, your employer or manager can advance your paycheck without any additional fees. So, you can always ask your supervisor or human resource personnel about the available options.
If you want a long term solution, consider working on solving the underlying financial problem which keeps landing you at a payday loan office. Try credit counseling as it could help you develop a realistic budget, and start investing in a savings account.
With the escalation of economic crisis, it seems that tougher times are ahead of us. That’s why you need to up your game as far as money management is concerned. With proper money management skills, you have the power to control your financial life for a better living. Here are a few money management skills you should employ today:
Set a Realistic Budget
Make a strict budget. Stick to your budget. Don’t be a spendthrift. It will only sink you into more debts. For instance, if you want to spend $300 on renovating your house, don’t borrow more.
Don’t spend carelessly. Be cautious with your spending. Take only what you need. Purchase the essentials first. Remember, money is hard to come. So, if you misuse your money, you will end up resorting to loans.
Have a Clear Plan
Plan well. Have a vision for your life. Give yourself strict limits when it comes to unbudgeted spending. Look at your net income. Compare it with your expenses. What are you left with? Don’t spend what you don’t have. Also, try to stay away from loans.
Track Your Spending
Small spending can take a lot of money. So, track small expenses before you end up overstretching your budget.
Learn to Save
When it comes to money management, saving plays a critical role. So, save more. Deposit more money into your savings account. It will play a key role in helping you build healthy based financial habits.
Financial emergencies are common. They can happen to anybody. However, don’t let them make your life harder while you can instantly secure a payday loan.
You deserve to be happy. And money will deliver you from any urgent financial problem. In the current economic times, people are experiencing serious financial challenges. And that’s exactly where payday loans come in handy. The above information will help you understand what payday loans are, how to qualify for one, and how to make timely repayments. Secure your installment loan today from Money Network and bring back the happiness into your life. The above article contains all you should know regarding payday loans.