Wednesday, October 15, 2008

The Benefits Of Payday Loans

And rightly so, because unless they go about it the right way, they can end up paying a massive amount of interest. That is a question that many people ask of themselves. But can you afford to take one?

Payday loans are becoming more popular, and more in demand, as the credit squeeze continues.

period. You should look for a deal that has a limited ?rollover? Not all payday loans are the same, and you can usually get a deal that suits you.

First, don?t opt for the first online advert you see. So, if you feel that you need a payday loan how should you go about it?

Although a payday loan should strictly be repaid next payday, many people find themselves unable to do so and it carries on for another month. That is when the ?rollover? comes into play. The rollover involves another fee payment. You don?t pay interest as such with a payday loan: you pay a ?fee?. For example, with a payday loans of $400 you could pay a $50 fee. That works out at an interest rate of 25% a month, or an APR of 300%. If you miss the payment, then you pay a rollover fee of another $50, so that your APR has suddenly risen to 600%. So a payday loan can be very expensive unless you make sure that you pay it. So, how do you do that?

Simple. Make your payment by direct debit from your bank on payday. Make sure that the direct debit is dated for your payday, or as close as possible to it, and you will always have money in the bank when the payment is due. If you are paid on a certain date each month, make the direct debit for that date.

The definition of a payday loan is that it is paid back on your next payday after taking out the loan. If you know your payday after taking the loan then you can arrange a direct debit to be applied on that date, and the payment will be made before you can access your account. That way there will be no temptation to spend the money before you pay it back.

If payday is a Saturday or Sunday, then you will be paid on the Friday, so arrange the direct debit for the Friday. If you have taken the loan out close to payday, you might have made an arrangement to pay next payday: in that case the same arrangements will apply.

If you ever make an arrangement to make repayments over a number of months, then it will be difficult to arrange a single direct debit date, and that kind of payment is not variable: it is made on the same date each month. Many people I know come to an arrangement with their bank in such situations.

You can open another account with your bank after discussing your problem with them, and arrange the bank to transfer your payment to that account on payday, and then have the direct debit remove that for your payday loan repayment on the 1st of each month. I know this all sounds a bit complicated, but it works for many people, and helps them to keep clear of rollovers that can end up with them owing more than they borrowed.

with a payday loan, arranged the same day, or at least within 24 hours. Well, payday can be ?today? I wish it were payday today??

How often have thought ?I could pay that in a couple days ? It will give you emergency cash when needed, such as an emergency car repair or medical bill, and allow you to pay it back next payday. However, payday loans have many benefits if you are able to make the payment at the right time.

The take it and use it well. So payday loans do have benefits to those that need them, and if you need one then think carefully before taking it, and make sure you get the best deal.


Anonymous October 16, 2008 at 8:05 AM  

Payday Loans are used by millions of people because they are readily available. Also, they are much quicker and easier than going through all of the hassle and paperwork that banks require. You can walk out with the cash you need in minutes!

Tiffini October 16, 2008 at 10:27 AM  

payday loans are so convenient thats its hard to say no. if you go into a branch you will probably be out in less than 15 minutes, cash in hand! and if you do it online its even more simple and fast than that. when money gets tight, dont stress about it, it happens to everyone. just know that payday loans can help.

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