Of all loans, payday loans are perhaps the easiest to get, as long as the lender is aware of your pay structure and get a post-dated check from you accordingly. This check may have a date that is a month later after the loan gets sanctioned or even later. The option of payday loan is the best when you face sudden cash requirement, but on a temporary basis. It is not good for inexperienced borrowers, especially if they have only a little control over their cash flow. This type of loan may become out of control at times. Therefore, you should consider certain factors before choosing the option of payday loan.
1. Know What You will Get
The amount a borrower will receive is much less than the one written behind the check. Even finance charges are deducted according to the terms and conditions. The borrower has to write a check of the amount plus the financial charges, failing which can lead to higher rate of financial charges.
2. Renewal of Loan
In case of failure to pay the loan back, the lender may give you an option of renewal of loan or consider a new loan. This new loan will have different financial charges along with extra late fees, thus the new amount with everything added up.
3. Repaying a Much Larger Amount
The payday loan is particularly meant for a time when we face sudden financial problems. It also means that as soon as our financial position gets better, we should repay the loan. However, always a trend is observed of the loan getting “rolled over”, leading to an ultimate amount piling up to become a huge one. This forms an undue pressure on the borrower to repay a much bigger amount.
4. Financial Position of Borrowers
Payday loans are also designed for an easy access to lower income borrowers who cannot get money from other sources. However, while these borrowers can get the loan easily, the lenders generally don’t consider their financial status.
5. No Option of Bankruptcy or Law Suit
Several payday sites make an automatic roll over of the loan. At other sites, you will have to make a contract with the lender that you don’t have a right to file for bankruptcy or any type of legal suit against the lender.
All in all, while opting for a payday loan, you should consider all these points and then choose to have it. https://www.paydayloanspot.org provides you a huge list of payday loan lenders among which you can choose the best suitable to you.