A Must Read Before Turning To Payday Loans
If you ran out of money to cover a sudden financial need or if you are under a depressing financial instability, borrowing money that can be paid off in just a short period of time is the best you can think of. But make sure to read this article before rushing in and applying for a payday loan.
Things to Consider Before Applying for Payday Loans
- Stellar interest charges.
Payday loan providers charges high Annual Percentage Rate, some can reach 1000%, it sounds crazy but it is true. In taking a loan, money come in fast, but repaying the amount you loaned seems to feel like forever.
- Payday Loan providers are allowed to access your bank account.
A lot of loan providers gather the payments from their borrowers through the borrower’s credit or debit cards. Lenders are authorized to deduct specified amount of money from your bank account even without your authorization.
- You are allowed to cancel payments.
You are authorized to cancel a specific payment transaction for any reason. If the bank transaction regarding your payment had been done after your cancellation of the said payment. You have the right to ask for a refund.
- Ask financial assistance from family and friends first.
Do not rush in and directly apply for a payday loan. You can first ask help from family members and even from your friends if they are capable of lending you some cash. You might be lucky and they can perhaps lend you the amount you needed and you can repay the borrowed money on an installment basis depending on what was set by your relative.
- Payday loans payments are done in a short time.
It is very easy to avail of a payday loan, but keep in mind that you are required to repay the loaned amount on the release of your next paycheck. A lot of payday loan borrowers cannot make their payments on schedule that is the main reason of paying extra interest charges. And others end up applying for another loan to repay their current loan, this situation can continue and can lead you to a permanent financial instability.
- Do not be easily lured, do some research.
You need to know the exact amount of money you need to payback to loan providers before availing a loan. A lot of lenders offers payday loan calculators, make use of it. Because there are a lot of lenders that take advantage of the need of borrowers and directly lending them the amount without providing documents or terms and conditions stating the amount that borrowers need to repay. Avoid falling for these lenders, so it is better to do some research first.
- If you failed to pay lenders might end up harassing you.
Avoid this kind of situation. Be stress-free by repaying the money you borrowed on schedule, by doing this you will be free from possible physical and other forms of harassment a lender can do.
- Fast loans are accessible but has a poor customer service.
Your loan application can be approved in just minutes. But according to the data provide by the Financial Ombudsman there are approximately 40 complaints monthly regarding payday loans. Some major complains are that lenders access their bank accounts without asking permission from them and some complains about bad customer service.
In an instance that a borrower cannot repay the loaned amount, it is stated by the office of Fair Trading that loan providers are allowed to provide another payment plan schedule. If you think that you cannot pay back the amount you loaned, it is better to consult your loan provider for the best solution.