If you are cash strapped or face with an urgent financial emergency, it seems that borrowing a small sum of money as a cash loan for a short span of time seems like a very good solution. But, before you take the bait and take on that payday loan, make sure you read this article.
Top Things To Consider Before You Take That Plunge
Interest rates can get sky high.
You have to know that payday lenders can have an APR or Annual Percentage Rate as high as 5000%! The money comes fast, but the repayments can be a total nightmare for anyone.
They will have access to your bank accounts.
Many lenders collect repayments off of your debit or credit card. They have the authority to take payments from your bank without having the need to ask your permissions for it.
Know that you can always cancel payments.
You have all the right to cancel payments. If your bank makes any payments right after you cancel, ask them for a refund.
Ask loan help from your parents or relatives.
Before you take on a payday loan, ask first your parents or relatives if they can help you. Perhaps, they can share their money with you and you can pay them back in installments.
Payday loans are to be repaid in a very short span of time.
Payday loans are easy to borrow, but you have to pay them back in the next pay day. Many borrowers fail to pay in time, and so their loans earn interest. Many of them take out another loan just to repay their existing loans, and the vicious cycle goes on, and on.
Do some research first and look somewhere else.
Do your research; you have to know exactly how much you will pay back in entirety before you get a loan. Many lenders have payday loan calculator, check on each. Some lenders deceive borrowers into lending without showing how much they will have to pay eventually. Do not fall prey.
If you do not pay, expect to be harassed, intimidated, and pestered by payday loan collectors.
This is a sad reality when it comes to payday loans collection. Do not be a subject of their intimidation and stay free of stress by repaying your loans and or avoiding payday loans altogether. Or expect to be bombarded by many calls every day, sometimes around 15 times a day!
Fast loans are easy, but expect poor customer services.
Loans may be granted in as fast as 5-10 minutes. But the office of the Financial Ombudsman said they receive over fifty complaints about payday concerns each month. Several complaints are about money taken off their credit or debit cards without their approval, or the unfairness as well as very poor customer services.
Once a borrower is unable to pay back, the office of Fair Trading says lenders have the following recourse – freeze the charges or provide another repayment plan. If you can’t pay your loan in full, ask your lender what they can do for you.