A blog article discussing the pros and cons of payday loans.
Why people opt for payday loans
Personal finances can be a struggle at times, and it’s easy to turn to payday loans if you’re short on cash. These loans are designed to help people get the money they need when they need it, but many individuals take out the loan for frivolous needs or use the money for purchases that aren’t actually necessary. By taking out payday loans, you may be securing yourself from future financial struggles without having to worry about your personal finances in the long-term.
Some people are searching for payday loans because of a desperate need for cash. Others are more interested in the easy-to-access, short-term, lump sum payments that payday loans offer. If a person is experiencing financial difficulties and needs immediate funds, they may turn to payday loans. However, if the loan is meant to be a short-term solution, it can lead to debt problems in the future due to interest rates charged on the loan.
What are the typical fees for payday loans
Payday loans are easy to get, but they are not necessarily easy to pay back. The fees collected by payday loan companies can range anywhere from $1.00 to $17.00, plus service charges and processing fees. For example, one company charged up to $25 in fees for a four-month loan with a two-week grace period.
Typical fees for payday loans range from $15-$35 per $100 of borrowed money. Plus, the fee is typically between $10-$25 in interest.
How to get a better interest rate on a payday loan
There are lots of things you can do to get a higher interest rate on your payday loan. The first thing to do is make sure that you pay your loan back on time, or within the time frame agreed upon by the lender. If you need extra time or it’s not possible for you to repay the loan on time, you should contact your lender and ask for an extension. You may also be able to negotiate with the lender if there have been any changes in your information.
The best way to get a better interest rate on a payday loan is to ask for a larger loan. That will usually get you an even more competitive interest rate. You may also be able to get an even lower interest rate if you give the lender collateral in the form of valuables or real estate that has increased in value since the date of your initial loan request.