11 Mar Things You Should Know About Payday Loans
Interest rates are exorbitant
Payday lenders lend funds according to and to the determined APR or Annual Percentage Rate. Such fixed interest rates are to be followed throughout the entire year. For example, paying interest rates throughout the year for 5000 percent or more is not surprising and quite typical.
Lenders gain access to your bank account
Through the functionality of the CPAs or continuous payment authorities, the majority of payday lenders are able to access your bank account and collect reimbursements of borrowed funds from your debit card. Often, such repayments are made with or without your knowledge. It can often become inconvenient in time as it is easy to set up but difficult to cancel.
You possess the right to cancel payments
From November of 2009, if you call your bank and request your bank to cancel any CPAs, they are legally obliged to do so. All you have to do is mention the name of your lender and the bank will take cancel any repayments of the said lender. In cases where payments are made even after your request, the bank is obliged to refund such amounts to you.
What about friends or family
It is recommended to seek any sort short term financial help your friends and family which can be reimbursed in monthly installments, before considering any payday loan from lenders who charge high-interest rates.
Other lenders may be a better option
Other short term financial lenders such as banks and credit unions are a better bet considering they offer required funds for those with poor credit rating and moreover help with the repayments making it more affordable.
Payday loans are intended for very short purposes
A payday loan offers short term funds to the borrower and is to be expected to be repaid in wholesome at the next payday. However, reports suggest that due to the lack of sufficient time, borrowers often fail to repay the entire sum on the said date and instead borrow from other sources just to pay off interests, pushing them into a debt trap.
Look before you loan
It is imperative you determine the right figure after calculating the total amount, including significant interest to be repaid before you even avail the borrowings from the lender. This is a practical step to help you avoid and suffer less financial strain on reimbursements of borrowed funds.
Ensure you can afford to pay back
Tend to check your current credit situation by merely evaluating and comparing all your expenses and revenue flowing in, and accordingly making decisions to increase your income or cut down costs in order to afford the reimbursements.
If you don’t repay, you may be harassed
Lenders tend to harass the borrowers for the pending payments by often calling them numerous times in a day or contacting you by other means.