The Cost of Payday Loans
Written by: Steve Cope
The Cost of Payday Loans
You need a cash advance immediately, but are too shy to ask
relatives or friends, and are scared of the paperwork involved
in a bank loan. Shed all your worries, for help is a mouse click
away in the form of ">http://www.a1paydayadvance.com/articles/payday-loans-no-credit-c
heck.html"> payday loans online. Payday loans are one of the
most convenient ways of getting a cash advance today with
practically no paperwork or other hassles.
Defining Payday loans
Payday loans are a short-term cash advance, when it is needed
the most...usually between paydays! Payday loans are a great way
to get some cash to tide you over to your next paycheck. The
goal of payday loans is to assist you with finances to meet that
unforseen requirement. The money is given as a cash advance and
is directly deposited into your personal checking account, after
which the cash advance funds, plus a fee, are taken out of your
account at the end of the loan which usually is your next payday.
However, a payday loan is no substitute for long-term financial
planning. This cash advance should only be taken to meet urgent
financial needs until your next payday. It is only in
emergencies that payday loans come in handy. Bad">http://www.a1paydayadvance.com/articles/payday-loans-overview.ht
ml">Bad credit payday loans also bail you out of situations
of bounced checks and late payment penalties by making the
appropriate cash advance available.
Understanding The Cost Of Payday Loans
Forewarned is forearmed! So it is with payday loans. If you know
what this kind of cash advance will cost you, you will be in a
better position to weigh the pros and cons of opting for it.
This way you will also know exactly what amount you need to pay
back to the payday loan companies.
Your first step should be to find out the best rate of payday
loan on offer. Whichever payday loan company you may choose you
must know what will be the fixed amount that you will owe upon
completing your payday loan.
Usually most payday loan companies charge around $20 to $30 per
$100 of cash advance. To ensure that there are no ambiguities,
insist that your final payday loan amount is spelled out in
dollars and cents. This will help you know what you need to pay,
when your payday loan is due.
To judge the best deal, go for the payday loans company that is
offering a lower APR. Usually, most payday loan companies
provide a cost-breakdown per 100-dollar increments that coincide
with the rate.
Furthermore, most payday loan fees are based on the duration of
the cash advance. The standard APR for most companies falls into
the 400 percent range. As an example, suppose you were to borrow
$100 at a fee of $20 for a 2 week period and if you did not pay
if for a year, your service charge would be $520 for a 520% APR.
To which you need to remember to add the original $100 that you
There may be a situation where you are unable to repay the full
amount of the cash advance to the payday loans company. In such
a situation, the payday loans company generally charges the
payday loans finance fee and defers the principal payment over a
longer period of time, usually another 14 days.
The Other Hidden Costs
There are several hidden costs in faxless
payday loans! Remember, if you are unable to pay this cash
advance and you happen to lose your job, the clock does not
stop. If you default on the cash advance, which includes the
principal plus interest, the payday loan company will reclaim
the entire amount plus all the interest accrued on this loan. A
payday loan company may exercise a number of options to collect
this cash advance:
ˇSue you for the funds.
ˇUse a collection agency.
ˇEnter your details into a bad credit database which may limit
your capacity to cash/write a check for commercial purposes
ˇFile a legal complaint for bounced-check charges that may leave
derogatory information on your credit file.
By now, it should be clear that it is not prudent to go for
payday loans without being aware of the repayment structure. To
play it safe, make sure that the cash advance is repaid on time
to the payday loans company. Read the fine print before you sign
the agreement and understand the worst-case scenarios before
deciding to take a payday loan. Once you understand the costs
involved in obtaining a cash advance, you are a step nearer to
fully enjoying the benefits of payday loans!
At the A1 Payday Advance website you can apply for a payday
loan with us, read news or articles about the payday loan
industry or find other payday lenders to meet your needs. Visit
our online payday
loans site when you need a little extra cash.
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About the author:
Steve Cope is the manager of A1 Payday Advance and has written
several articles on the payday loan industry to help the
customer better understand payday loans and to make an educated
decision on whether or not to aquire a payday loan. At the A1
Payday Advance website you can apply for a payday loan with us,
read articles about the payday loan industry or find other
payday lenders to meet your needs. Visit us at
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