Payday Loans
Payday loans are sometimes a necessity for those people with bad credit and a lower income. These people will go to this type of borrowed money because no one else will give them a loan and they need the funds. A payday might not be the best move to make, but they are extremely helpful to a select group of people.
There are places that you can go to get a payday loan. There are some places that are online, such as https://forbrukslånpådagen.net/ where you are able to get it without having to visit the place in person. You could visit their website online and check what they have to offer.
This article’s scope will explain the details of a payday loan and how it can affect you and your credit in the future. It will give some alternatives as well in case you want to check all your options. There are many things that you could do to get the money that you need.
How Do They Work?
You will have to apply for the loan – this could be online or in the lender’s office. As soon as you apply, the lender will look at your information. They will have you show proof of your checking account, and they will want a bank statement. They may also want proof of your
income so you will want to bring in at least two paystubs. They will also want a signed check from your checking account or a debit card number from you. This is so that they can withdraw the money directly from your checking account on the day that you are due. You will have to pay the whole amount of borrowed cash off all at once, usually on your next paycheck.
How Much Does It Cost?
The cost of a payday loan varies depending on how much you borrow. For example, if you borrow $500, you will have to pay back and extra $75 for a total of $575. There are varied sizes of loans that you could depending on your state – you can get one from $300 to $1,000. If you do not pay it off the first time, they will continue to add your fees each month. Visit the following link for more information about the costs: https://www.consumerfinance.gov/ask-cfpb/what-are-the-costs-and-fees-for-a-payday-loan-en-1589/. You could end up paying two or three times the cost of the borrowed money if you do not pay it off on time.
Does it Build My Credit if I Pay Back a Payday Loan?
You will not build credit by paying back a payday loan because most lenders will not report the payment on your credit report. If you fail to pay it back, though, they will report that to the credit bureaus so that you could hurt your credit by not paying it back. They will also add extra fees to your bill each month that you fail to pay.
What Information Do I Need for a Payday Loan?
You will generally need a bank account that is active, and ID of some kind, and proof of income. You also need to be at least 18 years old and may need to have a social security number. You can still be denied a payday loan with all the information that you provide, especially if you are active-duty military. If you do not have sufficient pay or savings, you could also be denied.
Payday Loan Alternatives
Use a Cash Advance App – You could use an app such as Dave, Brigit, or Earnin to get a cash advance. You could get your paycheck up to two days early if you use these apps. There are usually eligibility requirements that you need to follow. See here for a list of the most popular cash advance apps. They also have caps of how much that you can borrow.
Get a Personal Loan – You could try and get a personal loan from a bank or online lender to save the excessive fees from a payday loan. Credit unions seem to be able to help more than mainstream banks and are more willing to give out smaller loans. You might also be able to find an online lender that can give you a personal loan with a lower APR than the payday loan.
Ask a Friend of Family Member – You could always ask a friend or family member for a small loan, but you would have to make sure that you pay it back as soon as you can. You do not want to cause ill feelings, so you do not want to default on that borrowed money. You will not have any interest fees if you go this route.
Ask If Your Personal Bank Has a Small Loan – Since you already have a relationship built with your personal bank, see if they have a small loan that you could take out. You would probably get a better APR than a payday loan or a bank that you are not familiar with. Your personal bank would also have all your personal information for your application.
Reach Out to a Community Organization – There are many different community organizations that you can reach out to for important bills such as your rent and utilities. You can also call 211, which is the United Way, and see if they can help you. They have leads to many community organizations and can probably find just the perfect match for you.
Credit Card Cash Advance – If you already have a credit card, many of them will let you take a cash advance. It can be expensive to do this, but it will still be less expensive than a payday loan. Sometimes, you can get a new credit card that will allow you to take a cash advance, as well. You just need average credit scores to get this done.
Pawn Shop Loans – If you have any items of value, you could take it to a pawnshop and get a borrowed cash from them. They accept many items such as electronics and weapons and can give you a portion of what they are worth. They cannot give you full price, because they will have to sell your item if you default on your loan.
Payday Alternatives to Avoid
Title Loans – A title loan is a borrowed money on your car title – these loans also carry a high interest rate and are difficult to pay off. Since it is on your title, the lender can repossess your car if you do not pay off your loan. You will have monthly payments and if you default on even one of them, they could take your car, leaving you without transportation.
Long-term, High Interest Installment Loans – These types of loans will end up costing you more than a typical installment loan. They are usually for people with lower credit scores, so they have higher interest rates. If you fail to pay these loans off, they will report to the credit bureaus and you will have even a lower credit score.
Conclusion
If you choose to do a payday loan, you need to be aware of the high fees that go along with it. You will need to also be aware that these are due on your next payday. You can sometimes get yourself stuck in a loop that has you rewriting the payday each month because you cannot afford to pay it off and leave it paid off. You just need to be careful if this is the alternative that you choose.
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