Payday Loans: A Quick and Confidential Way to Get Cash in Advance |
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Payday loans are a quick and confidential way to get a cash advance until your next paycheck. It is a perfect tool for your financial obligations when you are short of cash and need money quickly. Payday loans take care of your short-term cash emergencies. However, several economists and industrial researchers are against the payday loans. According to them, if you have high debts, payday loans hasten rather than relieve your financial ruin. These loans shift your income from basic necessities to loan fees. The interest rates on payday loans are remarkably high. At present, entrepreneurs all over the country in every state (where permitted) are opening up shops offering these loans, plus you can find them on the Internet. Whether consumer groups like them or not, they are here to stay and consumers seem to want them. But frankly speaking, with their high fees and non-declining balance, payday loans can turn financial strain into financial chaos. When you apply for payday loans, you write a personal check for the desired cash, plus a fee for the lender and interest rate. Generally, the interest rate is about $20 per $100. The lender holds your check for two weeks or until your next payday. On that date, you can either redeem the check with cash or allow the check to be deposited. But if you fail to cover the check, the lender collects another interest and holds the check for another two weeks. The process is known as rollover for your payday loans. If you extend or roll-over the loan, you'll pay additional fees each time. The fee may not sound too bad, but studies have shown that interest rates on payday loans range from 390% to nearly 900% and that most lenders don't quote accurate interest rates. These loans have fees and hidden costs associated with them. If you don't take a step of your own to learn about them, you could be in danger. The payday loans industry is growing at the speed of a storm in the country. According to a recent study, payday loan firms are enjoying a 48% return on investment, assuming a 40% tax rate. The study also reveals that more than $10 billion a year in payday loans are made nationally through 8,000 to 10,000 stores. Usually, payday lenders portray themselves as mom and pop business owners, but in fact they are part of a giant industry dominated by chain stores. The four largest payday loans lenders, namely Advance America, Check N Go, ACE Cash Express, and Check Into Cash, have more than 500 stores each. Most of these stores are prominently located in low-income or minority communities. The interest rates on payday loans are 10 times higher than a traditional small loan. And these loans are secured against borrowers' own checks. Therefore, borrowers need to be very careful regarding their repayments. They need to pay both the principal and the interest, or face possible prosecution on bad check charges. The Internet has played a big role in the rise of payday loans companies. All the companies are fully furnished with Internet facilities, thus making the application process more comfortable and easier for consumers than ever. When a consumer submit his application by filling information like: proof of a checking account, proof of employment in the form of a pay stub, proof of residency, your last bank statement, your social security and drivers license numbers etc, the lender immediately processes the application and an approval is given within 24 hour or less. Some payday loan lenders take up to 72 hours to approve an application. So make sure to look for one that can process it within 24 hours. Moreover, try to find out the complete company profile before you make a deal. Payday loans are risky no doubt, but they can be helpful in giving you quick cash. So, work cautiously and proceed further! |
