Payday loans are usually used for small amounts of money [usually a few hundred dollars] to survive a sudden crisis until the next pay. The price of such loans is very high, with annual interest rates of more than a thousand percentage points.
However, these loans are very popular. You will find that customers borrow five or six such loans each year. There are many reasons why people use these loans. As mentioned earlier, there are some sudden financial crises, such as accidental hospitalization fees or college fees. These loans are also used to pay late fees for credit card bills or overdraft fees for bank accounts. They are popular because funds are transferred directly to your bank account when you apply for an account. The previous credit history was not a problem, even if it was not good.
Repayment of payday loans
The loan does not have to be repaid in cash on the maturity date. You only need to make sure that there is enough money in your bank account to pay the loan amount and interest, and the lender will automatically withdraw the money from your account on the repayment date.
Usually, the money you borrowed plus interest should be paid within one month.
Some lenders allow you to choose a repayment schedule
Some lenders offer a choice of continuous repayments, and you can authorize them to repeatedly try to withdraw some or all of their payables from your bank account after the payment date.
When is it meaningful to issue a payday loan?
A payday loan makes sense if and only if you can repay it on the agreed repayment date. By the date of repayment, their work costs will be very expensive. The lender may propose to extend the loan to the next month or more, but this is just a means of sales, trying to get you to pay more than necessary. A good creditor will freeze the fees and interest until the last payment is made no more than two months. And you better stick to this.
How to choose a payday lender
· Check the best interest rates between different lenders.
· Do not provide deferred credit
· Don't borrow more than one loan at a time. Don't take one to go to another.
• Check that the lender is registered with the trading agency because the charter of the trading agency requires its members to adhere to strict rules. One of the main points of these regulations is that they will sympathize and actively deal with financial difficulties
· You should consider the terms and conditions of the loan. Usually, payday loans must be repaid between 15 days and 90 days. Therefore, choose the lender's loan repayment period for your comfortable payday loan company. Therefore, it is best to compare the terms and conditions of different payday loan companies and choose the best option that best suits your terms.
Debt collection after extended payment time
In this case, the lender can contact the debt collection agency to collect debts on his behalf.
A research report shows that millennials born after 1982 are more likely to use payday loans due to poor credit history. The high cost of payday loans leads to their bad credit history, so this seems to be 22 cases! As a result, cheaper forms of financing are not within their reach, as these institutions check their customers' credit history before issuing loans. The relative ease of obtaining payday loans has attracted millennials.