Most people have came up short on a bill or two in their life. Whether their car broke down or their fridge died, something unexpected that you don’t have the cash to fix at the time. When this sort of thing happens, most are able to borrow from a family member or a friend. For some this isn’t an option, so other options can be using your credit card, getting a loan from your employer, or taking a line of credit or small personal loan. Others pawn valuables or use their overdraft protection from their bank account.
If none of these things are an option and you have an emergency in your midst you might consider taking a payday loan online. I suggest taking this route only if you have exhausted all other alternatives and only if you absolutely need this money. Never use this type of loan to make a purchase or pay for a service that isn’t critical to your life.
The reason a payday loan online should only be used in an emergency and as a last resort is the APR rate. The fees associated with a payday loan range typically from $15 – $35 per $100 borrowed for a 2 week period. Say you take a $300 loan and get a $25 per $100 borrowed rate (600% APR) and pay it back by the due date. You will have to pay back $375. This isn’t so bad for getting cash fast and easily. Lets say you take the $300 loan and keep defaulting and renewing it for a year and only paid off the interest but not the principal amount at the same rate of $25 per $100 borrowed. That $300 loan will now cost you $950. That’s an expensive loan. If you missed paying down the interest it will cost even more as the interest compounds.
This is why it is crucial to pay these loans off as soon as their due. That way you don’t lock yourself into a debt trap. The best place to look for a payday loan is online since it is so easy to compare rates and the terms of the loan from the multiple lenders available on the net. This makes it easy for you to shop and compare until you find a lender that suits your needs. There are also review websites that have done the research for you, so you can find the right lender that much easier online.
Qualifying for this type of loan is generally pretty easy. In most cases you need to be over 18, have an income of $1000 per month and a checking account. These rules are because it’s illegal for a person under 18 to enter a legal contract. You need to have a sufficient income to pay the loan back, and they need to be able to deposit the money into your account.
If you only take online payday loans when an emergency arises and you have exhausted all other options. You pay back the loan when it’s due to avoid paying more fees, than taking a payday loan online will not cause you any financial hardship.