Payday Loan Fees
For a fee of between $15 and $50, the borrower can get
money for an emergency or money shortage to tide them
through until their payday. If borrowers decide to roll
what they owe over for another fortnight, they are
responsible for another fee at the same rate.
Who Needs A Payday Loan?
The need for this type of service has arisen since banks
and other lending institutions generally don't lend small
amounts of money on these terms. The trouble with a payday
loan is the interest rates they offer is extremely high,
the amount of interest is calculated at around 300% per
annum.
Often borrowers fall into the trap of borrowing money from
a payday loan provider every fortnight, in order to stretch
their income further, in this case a payday loan is a very
dangerous choice. People who get caught up in the trap of
borrowing money from these companies, and rolling the money
over more than once run the risk of getting further in to
debt.
The RIGHT Way To Use A Payday Loan
The only way to borrow money from a payday loan company is
to understand the associated costs, and only do it in an
emergency, where the option of borrowing money from
friends, colleagues or family, and giving them a forward
dated check is not available.
Care should be taken to make sure that the company is
legitimate; one of the leading causes of fraud is from
companies posing as payday loan companies. Find out where
the company is situated, ask for their company phone number
before signing up, and try ringing it. Look over the
Internet for reports or information on the company, and
from other people who have lent money from them.
Be very wary of payday loan companies that ask for a fee
before forwarding money to the borrower, and avoid giving
out bank account numbers. Borrowers should opt for wire
transfers from western union rather than give out bank
account numbers and details as they run the risk of a
fraudulent company accessing their accounts and creating
further money problems. Some payday loan companies are
scams, and the borrower lends money at their own risk, so
care does need to be taken to choose legitimate companies.
The best way to deal with a payday loan company is to
understand how their fees and charges work. Know exactly
how much it is going to cost you to borrow the money, and
what will happen if you can't pay it back after payday. Be
very choosy with payday loan companies, some offer you a
better deal than others.
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Liz Roberts is a loan consultant with NewHorizon Finance
and has been providing consumers and business owners with
financing since 1989. Bad Credit? Join our mailing list for
tips on building and repairing credit yourself, without
hiring a credit repair service or view our list of credit
cards for bad credit at
http://www.newhorizon.org/Info/unsecured.htm
Copyright 2007
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