Finding accurate information about payday loans can be difficult. Opponents from the banking and finance industry have clouded the internet with false information leading to confusion and lack of trust. In reality, a payday loan is just like every other loan. Before turning to a to it for relief, one must simply know how they work and what to look for.
What are Payday Loans and How do they Work?
Imagine borrowing money from a friend but writing them a check to be cashed on a future date. A payday loan operates under the same concept. Borrowers write a personal check for the amount borrowed plus the finance charge and receive cash. Nowadays, physical checks are uncommon. Hence, borrowers sign over electronic access to their bank accounts for repayment of the loan. Lenders hold the checks until the borrower’s next payday when loans and the finance charge must be paid in one lump sum. To pay a loan, borrowers can redeem the check by paying the loan with cash, allow the check to be deposited at the bank, or just pay the finance charge to roll the loan over for another pay period.
Common Misconceptions about Payday Loans:
Payday lenders are dishonest when it comes to fees and terms.
The Truth in Lending Act makes it mandatory for lenders provide up-front, full disclosure. In addition, the CFSA Best Practices and Consumer Bill of Rights requires all CFSA approved payday lenders put consumer education and empowerment first. Just like every other loan when you need a payday loan, it’s important to read all the fine print and to make sure that the lender is legitimate.
It costs less to pay overdraft fees than to choose a payday loan.
Payday loans are much less expensive than overdraft fees. Overdraft and late fees are applied to your credit card or bank account without a legitimate warning. This will lead you to a horrible surprise when you check your bank statement. A payday loan clearly states your rate, which is a one-time flat fee before you sign.
Furthermore, the fee is usually around around $15. In comparison to an overdraft fee or credit card fee which are usually over $30, this is quite the bargain. Under the assumption that one is a responsible borrower, a payday loan is a smarter alternative.
Payday lenders charge extremely high rates to make huge profits and take advantage of people.
This is a flat out lie about the payday industry created by big banking. When compared to alternative lending substitutes, payday lenders are considerably less profitable. Small, short-term loans are expensive to compensate for a higher demand. The average profit margin for payday loan only stores is only 3.57%, meanwhile for commercial lenders it’s about 13.04%.
Payday Lenders prey on those deep in debt or have bad credit .
Payday lenders do not take advantage of those deep in debt. More accurately, the reciprocal is true. Those with bad credit, try to take advantage of payday loans. If one is a responsible borrower, payday loans are a much better option. However, due to the flexibility and credit score requirements, payday loans by nature attract a higher rate of irresponsible borrowers than that of traditional loans.
Payday lenders charge hidden fees.
On top of being false, this is illegal. The Truth in Lending Act makes it mandatory for lenders by law to be upfront and forthcoming with their fees. Hence, fees must be outlined in the lending agreement. Usually, there will only be one flat fee – and no hidden fees or additional interest. Many lenders allow for customers to remove the fee for a timely payment. Similar to other types of loans, a high percentage of borrowers do not read the loan agreement carefully.
In conclusion, it is safe to say that if one is a responsible borrower, a payday loan is a low risk option with a safety nets if one were to default. At Federal Advance we take pride in offering great financial products from our network of quality lenders. We increase your chances of being approved by presenting your information to an entire network of providers. We use 2048-bit encryption SSL to prevent any unwanted disclosure of your personal information. Request an online PayDay Loan, a Personal Loan, or an here, or an installment loan from our huge network of lenders today.
3 Things You Need To Be Doing To Look After Your Teeth
Many people don’t prioritise looking after their teeth, however it is so important as we only get one adult set...
Car Care and Checklist for Road Trip
Are you planning a road trip across Australia? If you are, you must know that you couldn’t have chosen a...
Interior Design Secrets For Your Living Space
Interior design is not something that comes naturally to the majority of us. Figuring out how to pull a room...
Office Building Maintenance You’ll Need To Take Care Of
Like other buildings, office buildings need to be well-maintained so that they are safe, comfortable, and pleasing aesthetically. To accomplish...
Text Messages Vs Sexting Apps – What is best for fun?
It’s no secret that sexting has become a popular way for people to get their kicks. But what’s the best...
Hottest Trainer Brands for 2023
It’s time to update your wardrobe! As we get closer to 2023, it’s time to get the freshest fashion trends....
How To Have Great Personal Hygiene
Personal hygiene should be a basic practice of everyone’s routine. Feeling healthy and clean is a direct response to great...
Protecting Yourself From Scams
As the world becomes more digital, unfortunately many people are using this as a way to scam hard-working people. There...
Marketing Tips For A Gym Wear Brand
When starting a gym wear brand, there are a few things you need to do and one of them is...
Why Is Quantity Surveying Essential in Construction Industry
Quantity surveying is an essential part of the Australian construction industry. It is the process of calculating and estimating the...
How to Maintain Upholstered Furniture
No matter if you have pets or kids, maintaining your upholstered furniture is quite a challenge. Even though vacuuming it...
How Do I Find a Good Bubble.io Developer?
Finding a good bubble developer to help build your app or digital product can seem challenging. How can you choose...
When is a right time for home repairs?
Summer is a popular time for a renovation around the globe. While it is true that bright days and warm...
Top 15 Alteryx Competitors
The world has seen a tremendous rise in startups and new incorporations in the business world. Companies have great potential...
Latest Wedding Trends for 2023
If you’re planning on getting married this year, chances are you’re probably overwhelmed and confused when it comes to wedding...
Tech8 years ago
Creating An e-Commerce Website
Tech8 years ago
Design Template Guidelines For Mobile Apps
Business3 years ago
What Is AdsSupply? A Comprehensive Review
Business7 years ago
The Key Types Of Brochure Printing Services
Law2 years ago
How Can A Divorce Lawyer Help You Get Through Divorce?
Travel10 years ago
Who Else Wants Also Nfl Hat
Tech2 years ago
5 Link Building Strategies You Can Apply For Local SEO
General7 years ago
Kobe Bryant With His Unique Nba Jerseys