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Shopping For A Payday Loan
By: Max Hunter iSnare Expert Author
You wouldn’t consider buying a new pair of shoes, a bicycle helmet, or an extra
pair of jeans without trying them on first to make certain they fit. After all,
a pair of shoes that is two sizes too small will never fit and they amount to
money wasted. Shopping for anything – products or services – is pretty much the
same. The smart consumer does some research, tries a few on for size and makes
sure that the purchase ultimately meets his or her needs in a variety of ways.
Finding the right payday loan to fit your needs is essential. You don’t want to
end up paying $50 in loan fees for something you could have gotten for $20 from
another lender. And, just as shoes come in all sizes, shapes and colors, there
are numerous variables associated with payday loans – items like the amount of
time you have to pay back the full amount, the loan fees that are involved, and
whether or not the lender will allow you to roll the loan over if you can’t pay
it back on time and how much that will cost.
Repayment Times - When you are searching for a payday loan, you need to examine
how long the lender allows for the loan to be repaid. Time is a major factor to
consider. For example, you just had a major car breakdown and it will cost $500
to fix it. You just got paid last week and don’t get paid again for another 25
days. You have already paid all of your regular bills and have just enough money
left to feed your family for the rest of the month until payday rolls around
again. You know that you could pay to have the car fixed on your next payday,
because you have fewer standing obligations to meet with that check, but in the
meantime, you have to get the car repaired immediately so you can get back and
forth to work. There are dozens of payday lenders to choose from, but about half
of them only loan money for 14 days maximum. That doesn’t do you much good,
since your payday is 25 days away. Therefore, you need to consider only those
payday lenders who can make loan arrangements extending out 30 days. That gives
you time to get your paycheck and pay back the loan on or before the due date.
Loan Cost – A survey of Internet payday loan websites reveals that the average
loan cost is $25 per $100 borrowed. At this rate, an individual borrowing $500
would actually pay the lender $625 (the amount loaned, plus loan costs) at the
end of the loan period. There are a few sites that advertise loan costs as low
as $10 per $100 borrowed, in which case the total cost for borrowing $500 would
be $550. However, some lenders disguise their actual fees by quoting a rate per
$100 and tacking on an additional fee as well. For example, a fee of $25 per
hundred, with a $10 additional fee, actually amounts to $35 per $100 borrowed,
for a total cost of $675 for a $500 loan. Borrowers should carefully examine the
stated loan costs and any fine print that identifies additional fees carefully
before entering into a loan agreement with a lender. Be aware that, if your bank
account does not contain sufficient funds when the lender attempts to withdraw
the amount you agreed to pay, the lender can also charge bounced check fees,
which range from $15 to $30. The good news is that increasing numbers of lenders
doing business on the web has resulted in some very competitive payday loan
terms being available. But, remember to shop around and find a good fit.
Borrowed Amount – The amount that you can borrow from an individual lender is
also a factor that needs to come into play in your decision regarding which loan
to take. Some lenders loan up to $1,000, $1,200, or even $1,500, depending on
the size of your monthly income. Others may only lend up to $500 and, in fact,
the average size loan made from Internet payday lenders is $500. How much you
apply for should relate directly to how much you absolutely need and how much
you can afford to pay back without having to roll the loan over and incur
additional loan fees.
Reputable lenders – One of the most important things to consider when shopping
for a payday loan is the reputation of the lender. Investigate online and see
which sites are recommended most frequently. If a lender is not licensed to make
loans in the state where the business is situated, that can be a warning sign
that the business is not the most reputable. Remember, if you get an online
loan, you are going to be giving this entity your account numbers and you don’t
want to give that kind of access to a business that doesn’t have a good track
record already established.
Ultimately, payday loans can serve an excellent purpose in an emergency
situation, especially for those who don’t have a good credit record or haven’t
used credit before and don’t have a credit rating. However, just like everything
else you shop for, make sure you get the right loan for your situation and
circumstances.
About the Author:
Max Hunter is the author of many credit related articles. If you are looking for help with Payday loan or any type of faxless loans please visit us at http://www.PaydayLoanChoice.com |
