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How do payday loans work?
Basically, the two most common ways of applying for payday loans
are: applying for payday loans online and
applying from traditional land based stores. Considering that you are currently
online, you are most likely interested in obtaining an online payday loan. With
these types of loans the amount you can borrow usually ranges from $100 to $500,
depending on your income level, but it will never be greater than your typical
paycheck.
At the time of your approval, the payday loan issuer
will deposit the funds into your checking account. A checking account is
required, so if you do not have a valid checking account, you will be better off
by visiting your local payday loan store. Once the lender receives your checking
account information, they will deposit your funds into your checking account
within a few hours. At the time of your next payday, the lender will withdraw
the amount you borrowed along with the fee they charged. If for some reason you
do not have the money needed to pay back the loan, you can usually file for an
extension of the pay back period. This will cost you an additional fee.
What fees are typically associated with a payday loan?
Unfortunately, the answer to this question is often
difficult to find. With many companies, you will often find out what fees are
associated with the loan towards
the end of the application process. Typical fees range from $20 up to $75,
depending on the amount of the loan. While this can break down to 15% to 20%
interest,
which is an expensive loan, it can still cost you less than the fees associated
with late rent, or bounced check and non sufficient funds charges. Alternative
ways to obtain some extra funds such as a cash advance check
from your credit card will not automatically attempt to get their money back,
however they charge you an extremely high percentage every month. With these
loans you can end up paying hundreds of dollars for the cost of the loan if you
forget to pay the loan back on time.
Are payday loans a fair deal?
The answer to this question is a matter of
perception. Payday loans are expensive, this part is understood. The FTC says
that payday loans
= costly cash.
On the other side of the fence, stands the individual who is in need of the
extra cash. When there are bills that need to be paid, or an emergency that has
to be dealt with, the loan fee seems like a fair price for the convenience provided.
The most important thing is that you do your research first. Consider all
possible options, and maybe payday loans are the best for you, maybe not. Just
remember that nothing comes for free, so there will be a cost associated with
obtaining a payday loan.
Do I need a fax machine for payday loans?
While you do not have to own a fax machine, one will
be required so you can prove your income and provide the necessary personal
information required by the lender. This should not be a problem because there
are plenty of companies offering business services where you can use their fax
machines. The most wide spread of these organizations is
Kinkos. You should avoid companies that
offer you a payday loan with no faxing required. There is something wrong with
that picture.
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