Payday Loans are they the right Decision for you

Have you ever been burdened with an unexpected expense such as a major car repair or medical emergency and short on cash and maxed out on your credit cards? If so you may have found yourself in the position of applying for a payday loan.

A payday loan has many names, it is often referred to as a cash advance loan, some call it a
check advance loan or a deferred deposit check loan. These loans generally offer a small short term loan.

They are quite easy to apply for, as you can apply in person, on the phone or on the Internet you won’t have to go through the hassle of a credit check, and there are no upfront costs. The process takes less than 20 minutes. The loan proceeds are automatically deposited into your bank account within 24 hours.

To qualify for one, you simply must show proof of a steady job usually two years with the same employer and that you possess a bank account. Then all you have to do is write a postdated check for the amount desired and a fee. The payday lender will then hold the check until you get paid, the typical loan period is two weeks. On payday, you then take cash to the lender and exchange it for your postdated check or you allow the lender to deposit the check. If you are unable to pay back the loan at then end of the two week period, you can ask the lender to hold the loan for another pay period, however you must pay the fee a second time and the loan rolls over, this is when a vicious and costly circle begins. Many borrowers find themselves paying annual percentage rates as high as 400%!

Payday lending laws vary from state to state, and some states such as Georgia have enacted a law that outlaws triple digit payday lending. Some of these companies have gotten around these restrictive state laws by teaming with with national banks that operate under the laws of a different state.

Payday loans very often are considered predatory in nature, because the borrowers that find themselves securing these types of loans, are often low income individuals or those that with poor credit that are in need of quick cash often. It then can be said that the very individuals that really don’t have a lot of money to “throw away” are the ones that end up paying huge fees coupled with outrageous interest rates more times then not.

Before you apply for a Payday Loan, it is recommended that you compare the loan fees, interest rates and other costs. It is also in your best interest to only apply for a payday loan if you know that you are able to pay it back at the end of the two week period.