We know you’re doing the best you can with finances but sometimes you just get in a pinch. Payday loans may be your best option when you’re trying to stay afloat or take care of an unexpected expense.
If you aren’t sure how payday loans work or what the benefits of using a payday loan service is, continue reading this article to get all the details you need.
Understanding Payday Loans
Companies like Bonsai Finance help people that need help with their money. If you’re in a bind, you should understand payday loans before you borrow any money.
Payday loans allow you to get the amount of money your next paycheck is going to be in advance. You get to pay it back after you get your paycheck or you can break it up into payments so you don’t put yourself back in a bind.
There are some things you need to know about payday loans though. Let’s go over them below.
1. Provides an Option When You’re Out of Options
If something happens that you weren’t expecting, it is easy to go into a panic. You don’t have enough money but your child’s tooth was cracked while they were playing sports.
You know it is important to get it taken care of quickly so the root doesn’t die. Your friends and family don’t have any money to loan you and you’re worried you won’t be able to get your child the help they need.
Payday loans will help you get the money you need when you’re in a pinch.
2. No Credit Check Required
If you’re worried about your credit score — don’t. Payday lenders don’t require you to submit to a credit check. You just need to prove your income.
3. You May Need to Show Your Tax Returns
While you may have your paycheck stubs on hand, you should also get your tax returns in case they need further information.
If you haven’t had your job for long enough to get a tax return, you should speak to the lender and ask how else you can prove your income.
4. Payday Loans Are Easy to Get
If you’re worried you’re going to have to jump through hoops to get a payday loan, you should know they are easy to get. Payday loans are so painless that you’re often able to secure one in less than an hour if you have all your information together.
5. Often Cost More Than Other Loans
One of the drawbacks of payday loans is they often have higher interest rates and fees than traditional loans. The reason these loans cost so much more is because of the high risk the lender has to go through to lend you the money.
If you have other options like being able to go to the bank for a personal loan, you might want to look into one of those instead. If payday loans are your last option, this can help you out while you’re in a bind but you need to be aware of what you’re paying for it.
6. Have the Ability to Extend
Let’s say that you get your payday loan and you come up against the time when you should have it paid off but you don’t have enough money. Depending on the terms of the loan, you’re likely able to extend the loan even further.
Speak with your lender and ask them about these options before you take out the loan so you know what options you have before you get the money.
7. Only Able to Borrow So Much
Your income dictates how much money you’ll be able to borrow. You can’t ask for $2,000 and get it if you don’t have the income to qualify you for it.
8. Use the Money for Anything You Want
Unlike vehicle loans that require you to use the money to buy your vehicle, you can use a payday loan to purchase anything that you want. Whether you need to pay for the dentist, hospital bill, car repair or other unexpected problem, it’s available to you.
9. There Are Interest-Rate Caps
Payday lenders used to be able to charge as much interest as they wanted to charge. There are now different laws in place to protect borrowers from extremely high-interest rates.
While interest rates on a payday loan are still very high, they aren’t as high as they once used to be because of the legislation that passed.
You should also note that there are also limited application fees and limits on other fees that payday lenders are allowed to charge you. If you think you’ve been overcharged, you should look at the laws that govern your county to make sure everything was done legally.
10. Helps You Out of a Bind
If you’re in a bind and you need money for those unexpected expenses, a payday loan is often your best option.
When you need to get something right away and your money is running out, you can talk to payday lenders to get the options available to you. Often, just a couple hundred extra dollars can change the whole situation.
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