What you need to know before...?
You should always keep in mind that a payday loan must be repaid on time to avoid penalty fees that could be almost equal to the sum of the money borrowed or sometimes they can be even higher. If you fail to pay it on time and constantly extend it that can create you financial dilemma.
A short period of repayment usually lasts for four to eighteen days depending upon the conditions of the agreement. The repayment date and the way it is going to be carried out discussed by the time the loan is given. Usually the borrower agrees to pay back the money before the due date. Moreover some lenders may take back the money by depositing the borrower`s post-dated check on an agreed date.
There is a fixed rate calculated and included into repayment for every given loan. The average rate is $15-20 per $100 borrowed. Because of the fact that payday loans are quick turn-around by nature, the annual percentage rate is usually very high. It is normal for the APR to be more than 200% or even higher than 400%.
If the customer fails to pay back the money on the repayment day, the term for repayment may be extended by loan providers, which many can find convenient, but disadvantage of the extension of the loan is additional fees that are added to your account. If you take for example $100 as a loan the fee to borrow it is $14. If you have extended your repayment for three times the new fee would be $60. That means that to the borrowed amount you have to add the original fee $15 plus three times the fee $60 to each $100 borrowed.
Usually the main requirement is that you should be employed. You having a job is a guarantee that you will be able to pay off the loan. You are expected to get a paycheck and therefore to pay the money back for a loan. A lender wants to know that you are employed and have a steady income. They don`t usually require you to have a good credit history, so in a way your job is your collateral.
The procedure is very simple. You apply, get your application approved, and sign the contract that indicates that you are to repay the loan on terms of loan provider. Make sure you read the contract thoroughly and clearly understand what is written there, if not do not be ashamed to ask any questions about what this or that term means. Sometimes the contracts are written in a legalized financial language that can not be easily understood by average common people.
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