Payday Loans - Questions And Answers

It doesn't matter if the economy is booming or in a recession. Many people have a difficult time making ends meet. Its sad, but true. Most people live paycheck to paycheck. When an emergency comes their entire world turns upside down and they find themselves in serious trouble financially. They may not be able to go to a bank for a loan. Either the amount needed is too small to borrow or they do not have any collateral or the credit needed in order to borrow from a "traditional" bank or credit union. Pawn shops may be an option, but who wants to sell or pawn your family treasures? Plus, pawn shops are expensive, and you usually only receive a tiny fraction of the true worth of the items you pawn. There is another option for most people -- payday loans (otherwise known as "fast cash loans", "cash advances" or "paycheck advances"). Payday loans are sometimes a reasonable option to tide you over to your next payday (although they should only be used in true financial emergencies). This article presents some of the most common questions and concerns people have about payday loans.

Is it better to use an Internet Payday Lender or a "Brick and Mortar" Payday Lender?

If you need immediate funds that cannot wait a day or two then the best bet is to go into a payday advance business yourself. The online loan companies will need time to wire the money to your account and it will take time to verify the information. They are also usually the most lenient about repaying the loan and demand that your paycheck be directly deposited into your account. Some brick and mortar stores may have these policies as well but not always. The best course of action is to compare the two and decide which ones work best for your particular needs.

When do I have to payback the money?

Most payday loan companies have their repayment dates set up for your next payday. If you get paid every two weeks, your loan will be due in two weeks. If you only get paid once a month you will have to repay that amount on that day. Remember one thing though: the longer you have the money out the more interest rate you will be paying. It is in your best interest to repay the payday loan as quickly as possible.

What happens if I don't have the money to repay the payday loans?

That would be a big "uh oh" because they want their money back. The most feasible solution, and one used most often, is to take out the money loan again before you attempt to pay bills. Some people find they cannot afford to pay back the entire loan so they simply borrow again, but at this time a lower amount of money. This gradually pays down the loan until they can finish paying it off. The big problem comes when you do not have enough cash to pick up the loan note and take it out again. If this is your situation you will need to talk to the loan company immediately. Some may be able to work out a deal with you to pay another week's interest until you get the money you need.

Will they check my credit?

One of the benefits of using a payday loans company, besides getting the cash you need immediately, is that they do not run a credit check to determine your eligibility. Their main consumer markets are those individuals who could not obtain a short term loan from a bank or do not have credit cards.

What if my banking account is overdrawn?

Most payday loan companies understand that this may be the reason you are in such dire need to borrow money. But... there are some loan companies, especially online, that frown on being overdrawn because it makes them doubt whether or not you will be able to repay the amount of money you are borrowing. You will have to check the payday loan company's policy on being overdrawn.

Kurt Lehman writes about faxless payday loans, payday loans in and second chance checking.

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