The Convenience Of Low Fee Payday Loans
You might be in a difficult situation financially, and it's a
few days away from payday. There are times when taking out a low
fee payday loan is a quick, easy, and even sensible solution to
your problem. If you are in danger of bouncing a check, or if
you need to make a payment on a bill that is due before payday,
and the late fee incurred will put you at risk of damaging your
credit rating, a low fee payday loan can help you. However, it
is important to know exactly what this type of loan is, what the
terms are, and what the financial risks are before you decided
to take this financial route.
A low fee payday loan is a short-term, unsecured loan, usually
granted for a smaller sum of money (less than $500) to
individuals who can provide proof of employment and continual
income. Taking out this type of loan for such a small amount of
cash is easy, because there isn't the paperwork and approval
process involved as with longer-term bank loans. This can be
done at a small check-cashing outlet, a pawnshop, and recently,
online. The borrower promises to repay the loan from his or her
next paycheck. The loan is made when the borrower either gives
the lender a check or a debit authorization for the amount
borrowed plus the finance charge. The lender consents to hold
the check or authorization until the borrower's next payday.
When payday comes, the lender may either cash the check, or the
borrower may get his or her check back by paying the full loan
amount and finance charge. It sounds easy, and with little
consequence, but there are some things to be aware of.
Typically, if you are investigating the option of a low fee
payday loan, you have very little cash flow to begin with, and
few other alternatives. Know what you are getting into. The most
important thing to be aware of is that there is a finance charge
that is applied to the cash til payday loan upon borrowing. With
a low fee payday loan, the charge is often quite a bit lower
than traditional payday loans. These types of loans can
predominantly be found on the Internet. The Internet has
increased the opportunity for business to offer payday loans at
highly competitive pricing. So, if whatever you are taking out
the loan for has a consequence less than the applicable fee, you
might want to reconsider. And if you are not able to repay the
loan right away, be aware that the interest you are charged
continues to accrue, thus increasing the payoff amount (there is
no refund of applied interest if the loan is repaid early). If
this is not an issue, and you are able to pay the loan back
immediately upon receipt of your paycheck, then perhaps a low
fee payday loan might be the solution for you.
Applying for a low fee payday loan online is a quick, sometimes
instant, way to get the cash you need. Often, credit checks are
not required as part of the application process. And the loan
money can be directly deposited into your bank account. However,
a low fee payday loan is only a quick solution to a short-term
financial problem. Don't borrow money against your paycheck for
impulse purchases, or just to have some cash in your pocket.
This type of loan can get very expensive very quickly,
especially if it is not paid back promptly. And it is not wise
to use low fee payday loans as a means of getting an extended
credit source. If you have a bill that is due and do not want to
risk hurting your credit rating, if you have an emergency
medical bill that must be paid, or if you are in danger of
bouncing a check, a low fee payday loan may work for you. If you
are aware of the finance charges you will have to repay in
addition to the loan amount, and you are able to repay the loan
immediately, this type of loan can be a useful, one-time
solution to a tight financial state.