Payday loans have been around for decades. They have helped many get out of tight money spots and also pulled some borrowers to the bankruptcy court. They often receive bad press as being predatory lenders who charge exorbitant interest rates and fees for borrowing. Most would argue that if one only borrows what they need and pays back within a short amount of time, then the interest rates aren’t so bad and the loan has served its purpose. Some considerations should be made before signing on the dotted line for one of these types of loans.
People who need money quickly, but can pay the amount back with the next paycheck, may benefit from taking out a short-term loan. It is not a difficult process. There are some requirements of every applicant, however. Anyone interested in acquiring one of these types of loans must be able to prove they have a regular income, must have a good credit standing, and be over the age of 18. One positive aspect about some of these loans is that the lender actually cares if borrowers will be able to repay and won’t lend to them if it doesn’t look like it will help them in the long run. Many questions are asked on the application about other payment obligations.
When borrowing from some short-term lenders, there is often a lower amount that can be accessed for first-time borrowers. As those loans are paid back properly, return customers will be allowed to borrow higher amounts. The terms range from ten days to six months. The payments can be broken down into four monthly payments to help borrowers get back on their feet without a large repayment amount due at one time. Many payday lenders charge high penalties and fees for not paying the money back on time. Some of the short-term lenders are more reasonable, especially if the borrowers contact the lender and explain how and when they can make payments to pay off the debt in full. Communication is the answer to having a good lending experience with short-term lenders.
Reasons for taking out Short term loans may vary, but whatever the reason, the number one thing people should remember is that loans must be paid back which will include interest. Fortunately, there are some short-term loans that don’t add on a lot of fees and the interest which are fairly low compared to others.