Payday loans can help you if you are under pressure to pay for something. It will allow you to borrow a small amount of money for a short period of time. This can be a good solution for your problems but you need to consider these things before taking payday loans:
The interest rates might be very high
You must know that interest rates might be very high when you consider a payday loan. To help you determine the interest rate, you need to take a look at the lender’s APR (Annual Percentage Rate). APR is the interest you have to pay if you are to borrow money the whole year.
Every lender publishes APR. It is crucial to check APR so you will know how much interest you need to pay if you borrow money. There are some lenders that charge more than 1,500%. You have to avoid transacting with such companies because, in the end, you will find out you owe double more than what you borrowed.
You need to compare the lenders
Knowing the APR, you can successfully compare the lenders. Your goal here is to find lenders that will not only automate the borrowing process but also make it affordable for you.
Lenders will get access to your bank account
You must be aware that most lenders will get access to your bank account because payments are usually collected from your debit card. This means that they can take payments from your bank without checking with you first.
You have the right to cancel your payments
As mentioned, your lenders can get access to your bank account. CPA (Continuous Payment Authorities) allows these lenders to get access to your bank account. However, you must know that you have the right to cancel any CPAs if you ask them to.
Make sure that you can afford to pay back
It is the responsibility of lenders to ensure that borrowers can afford their loan. However, many lenders are not doing proper checks. The responsibility should come from you. It is important that you ensure you really can pay it back when you need to.
There is nothing wrong with taking payday loans – especially if the situation is dire. However, it does not mean that you will forget other things that go with it. As a borrower, you should do your own research so you can compare. These can help you make an informed decision at the end of the day.