Payday Loans Online – Have you ever taken out a payday loan and later wished you hadn’t? Maybe you’re in the middle of financial hardship and you’ve done an online search for loans that are easy to get for those with bad credit, and perhaps you’ve seen some payday lender websites or lead generator websites. Most of them will sound promising and lead you to believe your problems will be taken care of, but that usually is not the case. There can be a few benefits to payday loans if you know what you’re getting into, but by and large you’re usually better off not using them even if you’re in a pretty desperate financial situation.
Why People Turn To Payday Loans Online
Businesses who offer payday loans online are usually offering them to a segment of people who may have trouble getting loans or credit cards from their local banks or credit unions. Most of your typical financial institutions have strict guidelines about who can get a loan, and usually those include having a substantial amount of monthly income, credit scores above 600 and even minimum amounts you have to borrow for some loans. But probably the biggest frustration with trying to get a bank loan is the amount of time it can take.
Usually when someone needs a quick emergency loan of about $300 or so, they don’t have time to wait for the bank to take days or even weeks to approve them, and many payday lenders have taken advantage of this scenario by offering loans for quick use. Their personal credit requirements are usually much less than what banks require, and in most cases they don’t even base them on scores given by credit bureaus. They also usually wire the money to the borrower’s bank account within days, or even in some cases the very same day they approve the loan request. It’s definitely understandable that people would want that money very quickly so they could pay the doctor’s office for an emergency visit, pay the auto mechanic to fix a car problem or pay for something else that they never saw coming. But borrowers need to beware that that money comes with a huge price.
Payday Loans Usually Come With Very High Interest Rates
One of the biggest reasons you should stay away from payday loans is because their interest rates are often so high that you will often pay back way more than the amount you actually borrowed. It’s not uncommon to see interest rates for payday loans listed as a 300% APR which means if it took you one year to pay off a $300 loan, you would pay $900 in interest alone. And 300% interest can be low for some online payday loans of which it’s possible to see over 1,000% interest rates. Even though it may not be the amount you end up paying in the end, paying back way more than you borrow often means you’ll be in a situation where you need to borrow money again, and may decide to take out another payday loan or auto title loan to cover your next expenses.
Other Dangers That Come With Payday Loans
You should be especially careful about payday loans online because you could put your personal information including your bank account at risk. Usually the lender will want your bank information so that they can deposit the funds into it, but they will also usually use it to initiate a funds withdrawal on the payment due date. If you don’t have the amount due on that date, you could end up seeing that attempted withdrawal deplete your account or cause an overdraft. Multiple cases of this happening could cause bank fees to add up and even a closing of your account.
Other problems with payday loans are that you may have to pay them off completely within weeks. And if you don’t, you may have to get loan rollovers that add up with those high interest rates. You also could get hit with fees for signing up for payday loans through a third party lead generator website since payday lenders have to pay marketing fees for that. And lenders like to try and sneak other little charges in the final payment as well. Failing to make your payment or getting charged with defaulting on a payday loan could send you to collections where you’ll receive harassing phone calls, and potentially even be summoned to court for a lawsuit. It’s best to avoid those scenarios at all costs.
Other Ways To Get Emergency Funds Instead Of Payday Loans
Instead of getting a payday loan to pay for emergency expenses, you should be prepared with other plans for paying these expenses. The best way is to start an emergency savings fund where a portion of your take home pay is set aside in a separate savings account and is left untouched until needed in an emergency. If you don’t have enough money saved up, you should ask friends or family for help, and they’ll probably work out some kind of loan deql with you. If they can’t help you, you may want to see if any local banks or your employer can offer a short-term loan or payday advance. While not many credit unions or locally-owned banks offer small dollar hardship loans, a few do, and these usually come with much lower rates and far more favorable terms than payday loans.
Getting Out From Under Massive Payday Loan Debt Online
If you took out a payday loan and now find yourself trying to get it paid while worrying about your financial assets, the good news is you can find payday loan debt relief. There are a couple ways you can do this without having to go to court to resolve things.
- See If The Lender Violated Any State Laws
Payday lenders are subject to laws written by the states, and specifically those in the borrower’s state. While some online only lenders may be harder to track down, if you find that any lender based in your state violated any law regarding payday loans, you may be able to have them stopped by contacting your state Attorney General’s office. You may also be exempt from repaying your payday loan.
- Seek Out A Payday Loan Relief Company
As with other loans that come with higher interest rates than you can afford, you may be able to find payday loan debt relief through a payday loan relief company. What a company like National Payday Loan Relief will do is replace your current payday loan with one that has much lower interest rates. Like any other lender, they will need to review your current financial situation, and you may need to verify that you meet a few other requirements. But you’ll be able to get much lower monthly payments and still be able to make ends meet with your other needs. Paying off a payday loan is difficult, but there usually are ways like refinancing your debt that can make it easier.