The Hidden Costs of Cash Advance Loans

Knowing the costs of a Cash advance loan

If you are scanning this, you no doubt know what its like to live from paycheck to another location.

Some people plan their finances very carefully and make sure they spend strictly in their means. They will never splurge on a brand new jewelry set, new clothes or a swanky new car if they knew it could possibly put them at a negative balance. However, sometimes even hard employees can be caught by surprise and thrown into a financial recession by some exigency such as an urgent situation car repair or doctor's high bill. When you're in this kind of situation, a payday cash advance loan might just be the additional boost you need to cope with the immediate money recession.

Before you apply for a payday loan, you should first make sure you really need it. In case of a complete emergency situation, such as unexpected car repairs or a higher than usual utility bill or high medical bills; taking a loan may be completely inevitable. However, you should stay away from taking a loan, if you have the tiniest suspicion that you might not be to repay the loan on time. You'd only be piling on more debt on top of the debt that already exists.

Researching cash advance loan companies

It is wise to research cash advance loan companies before doing business with them. A simple Google search can provide links to quite a few companies who each have different requirements and terms. By reading all of the fine print and comparing what several companies offer, you will be in a better position to choose the best cash advance lender for you and your individual situation.

The costs associated with a cash advance loan can vary from company to company and even from state to convey. The laws in California for instance may determine certain limitations on the fees that their companies are allowed to charge. The same rules may or may not be in force in Florida or North carolina.

One thing that you should know of is that as a borrower, you have certain protection under the law from the beginning. According to the Truth in Lending Act of 1968, all financial lenders must disclose up front any and all fees associated with the loan they are offering and must offer that disclosure to the borrower on paper. This disclosure also includes informing you of the annual percentage rate (APR) of the loan (or in simpler terms, how much the loan would cost you on an annual basis).

The APR of an average loan that is acquired via a traditional lender is somewhere in the neighborhood of 7%. Based on recent surveys that have showed the average payday cash advance loan cost the borrower about twenty-five dollars ($25) per hundred dollars borrowed, a payday loan carries an APR of approximately 650%. How do you arrive at such a high number? It's simple, really. Let's say for example that ABC payday lender charges $25 for you to borrow $100 and you need to pay back the loan plus the fee in fourteen days time. If you do the mathematics 소액결제 현금화 the APR of this sample loan would be 651. 79%. Of course as was mentioned previously, not all cash advance loan companies charge the same amount. The truth in Lending Statement can provide all of the details about any fees and charges as well as show you what the annual percentage rate is for your specific loan.

Another key factor to bear in mind is the repayment period for the loan. An loan will need to be paid in full within fourteen days. If you are able to pay off the loan and the associated fee in that period of time, there is nothing more for you to worry about. If you are like many people who avail themselves of this type of service you can't fulfill your obligation in the time frame outlined in your original agreement, the majority of payday cash advance lenders will assist you to extend the term of the contract. While this can be a tempting offer that enables you to put off thinking about your financial problems for another couple of weeks, you need to be aware that extending the length of your loan will add to the fees that you are responsible for. Most often, the fee for such a term off shoot is higher than the original fee.

Before you enter this or any other such contract, do your homework. Don't do what we are all guilty of from time to time and ignore the fine print of your contract. Read and know very well what you are setting yourself up for or you might just end up paying the price later!