With today’s economy the payday loan has become a popular way of catching up on bills. In fact, some people use the money to totally pay off their credit cards and this is a smart thing to do. This is great if friends or relatives aren’t able to help out. Of course, you can use the loan money for anything that you want but most people use it wisely and sparingly. The interest rates are a bit higher on these types of loans and they have to be repaid when the borrower’s next payday comes along. That is why they are called payday loans.
If you are considering this type of loans then you need to shop around and compare the interest rates. They differ from one lender to another and there is fierce competition between them. This is because these short term loans are becoming more and more popular. People are financially stretched so thin these days and are barely able to pay their bills and when an unexpected illness comes up there is cash needed on hand.
You can apply online for a payday loan and have your money the very next day in most cases. You have to be a U.S. citizen over the age of 18 and have an active checking account. You also have to have at least 3 months in your current job as well as have a social security number. In some cases, the payment for the payday loan is taken directly from your checking account so keep that in mind when getting the loan.
You can use the loan money for anything you want, of course. But with the economic downturn most people use the money to pay off credit card bills to save money in the long run. Of course, that’s barring unforseen problems. Another creative use for the loan money is to start a home business. Yes, payday loans can really solve a lot of problems but if they aren’t paid back in time they can cause even more problems. So be sure and make the repayment on time.
You can get payday loans at check cashing stores, pawn shops and almost anywhere but the easiest and most popular way to get these loans is online. The amount of these loan shops has been decreasing a lot since 2006. The down side to this type of loan is that they have such high interest rates. The number of people who are unable to repay these loans has increased threefold in recent years due to such poor economic conditions and high unemployment rates. Lenders are no longer able to charge more than 36 per cent annual interest on these loans.
Beware though, some lenders are crooks who use sham transactions, such as phony rebate schemes. Texas is especially bad about lenders who operate “unregulated credit service companies”. This is to evade the state small loan limits set by the Texas Finance Commission. So use great caution before getting a payday loan.