Payday loans: quick money you can spend the way you like
Payday loans are becoming very popular with more and more people, and there is no surprise in that fact. Imagine a situation: you need a reasonable amount of money and are not ready to wait. That money can be for anything, and it does not have to be a million dollar ransom for someone you love, the reasons can be a lot more mundane, such as to buy a present for a friend's birthday or pay for your health insurance. In other words, a payday loan is not something extraordinary that you can only apply for when the world is about to end, rather than a way to solve your temporary financial problems quickly and painlessly, without borrowing from anyone you know. More often than not, however, payday loans are needed for unexpected purchases that arise when you are strapped for cash and do not want to borrow from your friends or family. Payday loans are essentially small short-term loans, and their repayment does not have to be linked to your actual payday.
Payday loans are different from regular bank loans because they carry substantial risk to the bank lending the money. This is why the interest rates are very high (if you think in terms of years) but still look affordable enough if you repay the money in a couple of weeks or a month. That's the main reason why payday loans are so controversial: unless you have a concrete plan of repaying that debt, you can end up paying as much as twice the amount borrowed.
Getting a payday loan is very easy and does not require too much time either. In fact, you can apply online and get your application approved within a few hours. When applying for a loan, you usually have to provide your checking or savings account information, as this is how you will get the money being lent to you. That way the lending company can also be sure you are a real person and intend to pay the money back as agreed.
Typically, you can borrow up to a thousand dollars, some companies can lend a bit more. The first loan may be less than that, because you need to earn the trust of the lending company before they can give you the maximum amount. You can borrow for a few days or even several months. Some companies may decide to charge you for early repayments, others do not. You may be required to provide access to your credit history and fax some documents, although recently lending companies try to simplify the process and require just the minimum amount of information.
So, are payday loans something worth trying? If you have a solid plan and are sure you will have the amount required to repay the debt soon, then it's a great way to solve your temporary financial problems. You should keep in mind that payday loans are not intended for long-term borrowing, so if you need money for a long period, it's best to look into other options.