Payday loan is a popular cash source to assist borrowers on short-term periods. They are legal in many states, and a lot of lenders comply with legal restrictions. However, there are cases when consumers don’t use fast loans correctly and end up with unlimited roll-overs and loan defaults.
Why borrowers need payday loans?
Payday loans are quick cash advances meant to cover unexpected spendings. Lenders offer them on short periods up to 30 days, with high APRs. The average APR on loans exceeds 230%. Our experts encourage borrowers to take them only in urgent cases when there is no better alternative.
Cash advances are not suitable for monthly use, so borrowers need to consider other ways of getting extra money. A personal or installment loan would be a better solution in this case. The need of getting easy money in spite of exorbitant APR must correspond to the goal of taking the loan for. Try to cover regular bills and other monthly spendings with wages instead of taking fast cash!
Can clients afford to pay the interest?
Many US states use payday loan caps, which limit interest charges and fees to a reasonable figure. However, the APR starts from 230% depending on the state. We firmly suggest to check loan rates and repayment amount with lender before applying for a payday loan. All details disclosed in loan offer are crucial for reading and understanding.
Is it a good idea to use multiple lenders?
The answer to this question is a categorical No. Moreover, each payday loan is secured by pay check, and taking more than one cash advance per salary is against the law in most states. Borrowers are also in risk of ending up with a debt that exceeds the sum of money they earn per month, which results in failing to comply with the loan agreement. The consequences may be fatal: debt collecting agencies will start pursuing debt, consumer get caught in a cycle of debts and end up declaring bankruptcy.
THE BEAR recommends having one payday loan per time. Several short-term cash loans will result in a long-term financial issue for the borrower.
Are payday loans good for paying monthly bills?
The general advice is: do not use fast cash loans for regular expenses. The best solution is using the monthly income to pay for daily expenses. Reserve easy cash loans for one-off bills, like medical repair ones.
How much can I borrow?
With cash advances, consumers may borrow from $50 to $1,000 easily! On the due date, borrowers are paying full loan amount plus interest fees. It is better to ask for a lower amount for easier repayment to avoid loan renewals! Be responsible!
What is the main rule to follow with payday loans?
If we were to choose one golden rule for having a great experience with easy loans, then it would be: Borrow in case of emergency, and only the exact amount you need! Payday loans aren’t the monster some like to call them. The monster is the incapacity of some borrowers to handle their finances correctly. Think ahead and combine proper money management with a strict budget plan.
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