There are some critics of 'payday loans', some of which clearly do not accept the fact that payday loans are able to be used effectively. Some critics state that they are not beneficial and serve only to capitalise on people's misfortune which often culminates in them getting further into debt. I disagree with this and argue they can help people in need of money and the total ban on Payday Loans may have negative consequences.
The Annual Percentage Rate of Payday loans are quite high, the interest on a Payday Loan is not determined annually which the 'A' in 'APR' stands for. The central theme of payday loans is that they are used over a one month period and this culminates in the 'annual' percentage rate being inflated, often into the thousands of percent.
Indeed, in some states in America, Payday Loans have actually been outlawed but what benefit does this serve those who need money, but are unable to access credit anywhere else? The only people that benefit from this arrangement subsequently are the shady and often unlicensed 'loan sharks'.
The unlicensed lenders that operate almost everywhere are able to lend money to the most needy and they sometimes call at applicants homes to collect or arrange repayments. This must be scary for those who have used the services and if the money cannot be repaid there can be negative consequences.
Is it possible to use a payday loan appropriately? One key point to remember when looking at taking out a payday loan is to ensure that the money you have borrowed is able to be paid back accordingly. Only ever look to borrow a sum that you can pay back, and never borrow more than this.
If you had small cash requirements then a Payday Loan would be ideal as they cater for smaller sums of cash. If for example you needed to borrow 100 Pounds or Dollars then the amount repayable would be around 25 percent and you would be guaranteed not to have to answer the door to shady Loan Sharks!
As with all kinds of Loans, if the money that you need to borrow means you are unable to pay back the repayment, or the sum at the end of the month look for alternative funding streams. A payday loan can be effective, but they should not be used for longer term financial needs. Look for free, independent advice if you are experiencing financial difficulty.
The Annual Percentage Rate of Payday loans are quite high, the interest on a Payday Loan is not determined annually which the 'A' in 'APR' stands for. The central theme of payday loans is that they are used over a one month period and this culminates in the 'annual' percentage rate being inflated, often into the thousands of percent.
Indeed, in some states in America, Payday Loans have actually been outlawed but what benefit does this serve those who need money, but are unable to access credit anywhere else? The only people that benefit from this arrangement subsequently are the shady and often unlicensed 'loan sharks'.
The unlicensed lenders that operate almost everywhere are able to lend money to the most needy and they sometimes call at applicants homes to collect or arrange repayments. This must be scary for those who have used the services and if the money cannot be repaid there can be negative consequences.
Is it possible to use a payday loan appropriately? One key point to remember when looking at taking out a payday loan is to ensure that the money you have borrowed is able to be paid back accordingly. Only ever look to borrow a sum that you can pay back, and never borrow more than this.
If you had small cash requirements then a Payday Loan would be ideal as they cater for smaller sums of cash. If for example you needed to borrow 100 Pounds or Dollars then the amount repayable would be around 25 percent and you would be guaranteed not to have to answer the door to shady Loan Sharks!
As with all kinds of Loans, if the money that you need to borrow means you are unable to pay back the repayment, or the sum at the end of the month look for alternative funding streams. A payday loan can be effective, but they should not be used for longer term financial needs. Look for free, independent advice if you are experiencing financial difficulty.
About the Author:
A payday loan is, in effect a payday advance. It is used to tide you over until the next time you get paid. If you would like to apply online for cash advance then consider what the cash is needed for and, more importantly, would you be able to clear your debt when you next get paid.
0 comments
Post a Comment