Is A Payday Loan For You?
You got a bill in the mail and it’s an overdue notice. Your car payment is due in a few days and your bank account can’t cover it. You’re confused, worried and starting to panic a little. Right now you’re looking up payday loans and don’t know if it’s the right fit for you. So what is a payday loans? How does it affect you? Can you get into trouble for not paying it back? The following will attempt to better inform you.
1. What is a Payday loan?
A payday loan is a cash advance on your pay. The blog listed here goes into a little more depth about these loans and their structure. In short, you go through the process of getting qualified from a payday loan company and you get a check cut out to you. This process should happen the same day. What these loans do have is a fee for every set dollar amount, like every 50, 100. 150, etc. Most payday loan places require that you have a job, some sort of bank account and some form of identification like a state ID. The reason that most payday loan places require an open bank account is because they use it in the loan giving and repayment process.
2. Are there legal consequences for defaulting?
The answer to this question is that payday loans follow the same rules as other loans. If you look here you’ll see that people don’t go to jail for defaulting on a loan. Now if you get sued over a loan and fail to show up or ignore certain court orders then that’s a different story. In this case, a judge could issue an arrest warrant for your arrest but not over the sole issue of not paying a loan back. Your credit could get affected by not paying them back and it’s generally a good rule of thumb to just pay your loans off.
3. How does it affect you?
To simply put it a payday loan puts money in your pocket but leaves you indebted to the company that issued you the loan. In the short term, this can solve an immediate issue like a bill that is overdue. In the long term, this can cost you more than other options. The fees mentioned on tip 1 can add up to a lot if your loan is pretty high. It is not uncommon for some payday loans to rack up fees in the hundreds of dollars.
Whether something is for you or not is really up to you to decide. If you think that you can pay the loan amount off, then a payday loan may grant you the relief that you’re looking for. It is always advisable to look at other options with lower interest rates if you need the money that badly. Always keep in mind that a payday loan should be a last resort to solve your financial problems.