Facts about Payday Loans
Payday Loans are another of the group of loans in the “last resort” category. This is simply because payday loans are an expensive source of additional financing. The payday loan is intended to supply a short sum of money for a short period of time. The credentials to obtain one includes either a signed check for those who apply in person or a bank account that can be accessed electronically for those who apply online.
While payday loans do offer some advantages, not everyone will take out a payday loan in their lifetime. In fact, taking out more than one payday loan is one of the fastest ways to wind up with more debt than you can handle. They are quick ways to access a few extra dollars, but if you cannot pay the borrowed sum back on its due date, rolling the payday loan over becomes a costly experience.
Payday loans are short and simple, but they aren’t sweet. This type of loan is designed to tide someone over financially from one payday to the next. It provides an opportunity for even those with bad credit to obtain a small sum of money that can be used during a financial crisis or emergency. In general, the borrower could borrow a sum up to the value of his next paycheck.
With the evolution of the pay period from once weekly to twice monthly, payday loans usually have a loan period of two weeks and a loan limit up to the total of an individual’s paycheck. With the rising cost of everyday living essentials, it is becoming more difficult for individuals to make ends meet. Moreover, although the intention is to pay back the payday loan in full when the time rolls around, the cost of living today often prevents some payday loan borrowers from paying off their obligation when the time comes, necessitating a rollover of the payday loan with an even higher cost attached to it.