What is a Payday Loan and its advantages?

Can anyone give a detailed explanation about payday loans and its advantages?

I truly wish that more people would give you more factual answers.

A payday loan is a short term loan by which you borrow money against a post-dated check, by which you pay-off before or allow to deposit on your next paydate or the following one. It is an emergency loan to cover an immediate temporary cash shortage, by which to cover a bill that must be paid before your next pay day.

Some advantages are; The fee for this loan, though not cheap, is generally less costly than overdraft fees, exceeding your credit card limit, and it will not effect your credit standing in any way. You get the cash, for emergencies, or to cover bills, due before your next paycheck, immediately.

Since these loans (with CFSA member businesses) are not connected to credit reporting, or the credit bureau, in any way, they cannot be used to build credit. Nor, if you were to fail, or default, on a loan, it will never effect your credit reports.

In general, the fees are usually around $15 for every $100 up to a loan of $500, and around $10 for every $100 over $500 to the maximun allowable loan. Government regulations require that these Flat Fees be quoted out as percentage rates (APRs). This would then mean that a $100 loan, taken out for 15days would have a (flat) fee of $15, which the government requires be quoted out as 365% APR. Reality is, it is still a flat fee.

The maximum loan you qualify for will be based on around 25% of your gross monthly pay. This is a proven, and common sense, calculation of what is generally reasonably payable by most people. this also means that the "poor" can not be "preyed" upon by payday lenders.

The above also indicates that you should not take out your maximum qualified amount from more than one lender at a time. Many people have gotten into trouble by doing this. Then they go and blame the payday loan industry for the trouble they are in by their very own personal choosing. They, by their own choice, loaned out beyond their means by going to more than one lender.

An IMPORTANT RULE TO FOLLOW!:
Loan only from established, landbased, lenders, who are members of CFSA. Loan only from one lender during any given time.
______________________________...

True. Payday loans are not for regular use.
True. Payday loans should only be used for temporary emergencies. When you fall short of cash, needed immediately, before your next paycheck.

False! Compounded fees and interest.
There are no compounded fees or (in reality) extraordinarilly high interest. The interest (APR) quoted by payday lenders, and extorted by anti-payday loan spinmasters, is a FLAT RATE fee that the government requires be calculated and quoted as an APR. In all reality it is, and always is, a flat fee. Even if you default on the loan, with legitimate CFSA associated lenders, the Flat Fee does not change nor does it compound, there is no added interest, and the only additional fee may be a one time fee for the returned check.
Roll-overs and re-loans are not recommended, even by legitimate CFSA associated lenders. If you choose to do so, it is by your choice that you do, and you will re-pay the flat fee, again, each time.

False! If you fail or default, their collection policies will make your life miserable, and will ruin you credit.
CFSA member establishments are not associated with any credit reporting agencies, or the credit bureau. They are not permitted to practice aggressive, harrassing or intimidating collections. And!, they are not permitted to take their clients to court.
MOST IMPORTANTLY. All CFSA members offer payment plans, AT NO ADDITIONAL FEE, by which their clients, who are in difficulty, can pay off, and get out from under, their loans.

A Payday loan is where a company will lend you an amount of money (up to your monthly salary) and you pay it back (with interest) when you get paid. If you can possibly avoid it - DO NOT take one of these out! The interest is horrendous, there have been items on the news recently.

The only advantage is that you have a bit of cash to tide you over in the short term, but what do you do when you have to pay it back and end up short at the end of the next month?

A payday laon usually means that someone loans you money until your next payday. The advantage is that if you have no money then you get some to last till payday.

The BIG disadvantage is that payday loans have massive interest rates, so you will pay back lots more money than you will have been loaned. Thus you are likely to then run out of money next month and require another loan again and your debts will spiral.

Best to avoid if at all possible

I personally know people who had to file chapter 7 on having so many pay day loans.

It is exactly like all the others here told you. They are legal, it will be helpful for one moment in time, but unless you pay the entire balance back your very next payday, you will have joined the multitudes of people who have to borrow from another pay day lender just to pay the first one.

Once you get caught in their trap your entire pay check is no longer yours it will be used for them, and if they deposit one of the checks you have to write in order to get the loan and your bank account doesn't have enough money, then you start another overdraft snowball effect where you could end up not only paying the lenders but having your back account so overdrawn that the bank closes it.

Try another way if you can or unless this is a dire emergency wait till you get paid.

A Payday loan is a rip off - the advantages are if you are lending money you can reap HUGE profits.
It is a short term loan for a small amount of money with huge interest rates. I saw one advertised the other day at 430% APR.
That means if you borrowed Â£50 (or dollars - it all works out the same) and wanted to repay the loan in 2 weeks time, you would owe Â£827
Even at 100% APR (and I have never seen one that cheap) a Â£50 would mean a Â£192 repayment after two weeks.
Steer well clear is my advice.

The payday loan is one of the fastest-growing trash lenders out there. You write a check for $225, dated for your payday because you don't have the money to cover it until right then. The payday loan company will give you $200 cash on the spot - all for a mere $25 service charge, which equates to over 650% interest annually!

A friend of mine was caught in a web of payday loans. Basically, he had borrowed from one trash lender to pay another, and by doing this again and again had created a cycle of financial death. He was panicking because he was being threatened with criminal charges for writing bad checks by the very places that have a business model based on postdated "bad" checks. This type of business is legalized loan-sharking.

Payday loans have more disadvantages than advantages.

Be very, Very, VERY careful when looking into getting a payday loan.

There are several things to consider before you pursue a payday loan.

First, how much are you looking to borrow?

If it is only $100 or less, there are several alternatives to placing your personal credit and other issues on the line (talk about stress). What if you get sick and can not pay it on time...the late fess...well this is not good.

A payday loan is a loan on a needed basis, no credit check required, although reference checks are provided with other lenders in the area. Depending on what state, the amount borrowed can be up to 18% deferred fees added to the additional amount borrowed. Other words, in my company, if you borrow 325.00 your payback on pay day would be 396.34 The loans are there if needed to pay something and short on cash, which can be renewable on the payment payday. If not paid back, it's a charge off, taken to court to sue and a garnishment placed on your wages. You should be very careful if your attempting to get a payday loan. A payday loan is exactly what it states, it's a pay day loan. Good Luck!

i agree with the other answers...

here is a site that allows you to compare many different payday sites so that you get the best one for your situation. its free!

http://www.cardlister.com/LoanAdvances.asp?id=2

good luck

Want to know everything about payday loans click here http://onlinecashadvance.blogspot.com/

Have you ever been in a financial situation that requires immediate attention but you will not be receiving your next pay check until a certain date? If so, you might be able to qualify for an instant payday loan. Instant payday loans are quick, easy to get approved, and, in most cases, funds will be available instantly. Although, quick and convenient, an instant payday loan are short term loans. You will need to pay this loan back in about 7 to 15 days. Payday loans are far more convenient than going to your bank; you need to research some very important factors, before making a final decision on applying for a payday loan. The payday loan lenders take such a high risk with lending payday loans to individuals; that they need to compensate these risks with a very high interest rate.

http://www.worldbestloans.com/

Below are some points of interest that you might want to consider before you apply for a loan.First, you must compare different lenders and get the best rates or funds. This is always the most import step to take before considering any payday loan. Secondly, you must remember to have a current checking account and be a US Citizen. Third, many payday loans do not require good credit, but you need to have an understanding about the high interest rates that will apply to the loan. Find the lender with the most competitive interest rates. Fourthly, you will need to be able to provide a current, good, and solid work history.Don't go overboard with a loan that you might regret later. Do your research very well.

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