Ameriadvance.com
Everyone at some point in their life
has come into some kind of financial problem. One thing that may seem tempting
to fix different financial issues is taking out a pay day loan. Even though
this may be something that you are considering to help get you out of debt or
to pay this month's bills, you may want to take a closer look and see why pay
day loans can be a problem.
First off you need to understand
what a pay day loan is. A pay day loan may go by many names like a pay day
advance, cash advance, or deferred deposit loans, but in the end they are all
the same thing. These are short term loans that normally are supposed to be
paid off by your next pay check or pay period. Lenders will normally require
you to put down some kind of security for the loan like a check or pay check.
Since it is a "pay day" loan, you have to give proof of employment to
show you do actually have a pay day. There are no limits to what you need the
loan for and you don't have to give lenders a reason why you need the loan.
There is normally no credit check involved for this type of loan.
One of the main problems of these
loans is their interest rate. These interest rates can be extremely high
causing you to owe more than what you originally took out. Some lenders also
put on extra fees and APR, which then when it comes time to pay back the loan,
there is no way for the borrower to pay it back in full. This creates a vicious
cycle for people trying to get out of debt. Of course this may not be the case
with all lenders, but when it comes to getting quick cash remember, nothing is
free.
If you have bad credit and think
that taking a pay day loan will boost your score because it is a loan, thing
again. When a lender looks at your credit history and sees that you have taken
out a cash advance or pay day loan, it won't look good. Having this on your credit
history may send a wrong message to lenders by saying you already have trouble
paying bills or staying on top of your money. Of course since the reason they
look at credit score and history is to assess what kind of risk they may be
taking on loaning you the money, you don't want them to think you already have
financial troubles. These loans can also take a toll on your score because if
you do fall victim to the debt cycle, it will reflect in your credit report.
ไม่มีความคิดเห็น:
แสดงความคิดเห็น