Payday loans are oftentimes intended for small sum of money that is often few hundreds, which borrowers used to survive until the next payday, hence the name. In regards to the cost of these loans, it is usually high hitting at 1000 percent points of interests per annum. Still, it doesn’t stop people from taking this kind of loan.
You will soon find out that many people do apply for such loans and there are countless of reasons why they do so. Similar to what is discussed earlier, these loans are used to survive until their next paycheck but it can be used as well for emergency purposes, for paying late fee charges on credit cards or sometimes, on overdraft charges on bank accounts. They’re quite popular as the money is deposited to the bank account you enrolled almost immediately after applying for one.
There’s no need to wait on your due date before paying the loan. The only thing that you have to be certain about is that, there’s enough balance in your account to cover for the interest and the loan amount. Then after, the lender is going to automatically withdraw the money from the account on the repayment date. In most cases, you were only given a month to pay for the cash lent including the interest fee. Some lenders however allow you to choose a repayment schedule.
There are lenders that do offer continuous repayment options whereby you authorize them to do repeat attempts of taking either part or full amount due straight from your bank account.
However here’s something you must know before talking to direct lenders for payday loans, their offer would be sensible only if you can pay the money on or before the agreed date. Otherwise, it can be very expensive on your own as soon as you get past that date. Lenders may be offering you to get a rollover of the loan until the following month or more but, this is just a sales plot and an attempt to make customers pay more than what is expected. Remember that good creditor freezes the interests and the charges no longer than 60 days from the last date of payment.
Now, when you are in the process of selecting a payday lender, make sure that you check which among the lenders offer the best rate of interest, do not go for one that is offering deferrals, don’t take several loans at once and never apply for one to repay the other. As you do so, this will help you ensure that you’re doing transactions with the right lender and that you’ll be able to get into the right path.