Payday loans are available in almost
every state in almost any community. They are available to people to help them
through difficult financial times, like when a sudden bill or emergency comes
up and they do not have the money to pay for it. There are topics on the fees the
lender charges, the short term of the loans, and the legal aspects of payday
loans - all of which we will explore. We will look at some good points and some
not-so-good points, and you can make your own decision if a payday loan is of
value for you.
The combination of fees and interest
charges that the loan center charges can be of a very high percentage. Research
shows that sometimes amounts over 400% are the actual charges for a $500 loan.
As you can imagine, that sounds like a lot of money. But let's say you have
four checks or debit card purchases that will be overdrawn on your account. The
$87.50 fee for the payday loan is a better deal than four NSF charges of $35
each. So if you are in that position, you can save $52.50 in fees. Does it make
sense to use a payday loan in that situation? Yes, it does make sense if you
are able to cover the expenses on your next payday, which brings us to the next
topic of the short term for which these loans are.
The term for most payday loans that
I found in my research shows the maximum term of one month (or two pay periods
if you get paid twice a month). The company making the loan makes automatic
withdrawals from the bank account where it made the deposit at the beginning of
the loan. The company takes one-half of the agreed upon amount on the next
payday and the other half on the next payday. If you get paid only once a
month, the company takes the whole amount on the next payday.
There have been legality questions
raised about the short term loan centers opening all over the country regarding
the fees and interest charges being excessive. Most states have laws regarding
usury, which is charging an excessive amount of interest for a loan. Usury laws
vary greatly from state to state, and as a result many payday loan centers have
ties to a bank in a state with very lenient laws.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น