All You Need To Know About Payday Loans

It's all too common to approach the end of the month with nearly empty pockets. Having financial crunches sometimes is very common to everyone. Everyone have struggled in terms of finances and making ends meet becomes difficult at times. You have many options to manage them.

Payday loans are one such method where you can borrow a sum of money and then return it within the next payday, along with interest. But, if you aren’t wise enough about this, it’s better to stay away. As every other product which has its own pros and cons, this one is no exception.
We shall tell all you need to know before signing on that loan, which may sound great but has its own rows of problems.

 

How does it work?

 

Payday loans are short-term loans aimed to assist people until their next payday. The amount is paid and transferred directly to your pay accounts.

  • Most of the companies give you time until the next payday. There are other companies who give you a choice in choosing the repayment period.

 

  • On the prescribed date, the lender takes away, the principal amount plus the interest or called fee, directly from your bank account.
  • No matter what are your current month expenses, nobody will ever ask you. be it even for grocery or medical bills, or rent or anything else!

 

So, before you take a payday loan, please ask yourself lot of questions, even about the necessity to get one!

 

Payday loan fees or Interest:

 

Well, we said that they come with a fee or interest. So, how much is that? Maybe 5$ or Euro or that local region currency? Nope! The fee is somewhere close to 20-30$ or Euros in many places, for every 100$ or Euro you borrow.

So, it’s simply 20-30%!!!! And this is when you pay them back on time! If you don’t pay on time, extra default 30$ or Euro is added on top of the existing balance every day.

New rules have been introduced by Financial Conduct Authority have passed few laws, in the interest of the borrowers, that the total payable amount should never exceed twice the total taken amount.
The beyond time payment still stays here, as 15$ or Euros for every 100 borrowed. So, that’s 15% of the amount as late fees.

This is where you might have to think a lot and then decide. Just deciding for the moment and later repenting without being able to pay or your salary being less this time again!!

 

Recurring Payments:


Many loan lenders, especially this payday lender follow a mode of payment called the recurring payment. It is also called as Continuous payment authority. This mode enables the lenders to take back the money you owe to them, directly from the bank account via your cheques or debit cards on the exact repayment date.

In case your account doesn’t have that money, then you might have to pay bank charges for not maintaining balance. And you might again miss pay the debt, pay your bills, rent, food bills etc.

 

Don’t fall prey for such traps:

 

Payday advertising will surely be very clever for their marketing tricks. But, don’t fall prey for it, in case you need payday loans for the below reasons:

  • To pay another existing debt
  • To pay back other loans
  • The certainty of paying back 100% isn’t there
  • You want to pay for unaffordable stuff like parties with friends, concert visits, etc.

 

In the worst case that you already have problems in repaying your debt and paying credit cards, you can get confidential free service from the debt advice services. The adviser will help you to get your finances back on track, by negotiating with the people whom you owe money to. This will also fetch you the time you need to repay back, without allowing you to borrow money from others to repay back the money.

 

14 day cooling period:                  

In case you changed your mind for good, and don’t want to keep the money. You can withdraw from the agreement anytime within the first 14 days. You are entitled to pay the interest or fee charges for the taken amount and nothing else.

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