However, the payday loans come with their own disadvantages as well and the
most common ones are the fees and the interest rates, charged by the lenders.
They are higher than the mortgages and other loans that almost all of us are
familiar with, but the higher fees are actually explained by the far riskier
nature of this form of micro lending. In the case of the traditional loans, the
borrower is normally asked for a collateral and proven credit history, while the
payday loans are available to almost anyone with steady employment, fixed
income, and US citizenship.
With that said, they should only serve as a temporary relief and money
should be borrowed in such a way only when necessary; the cash advances are
suitable for meeting some unexpected expenses, paying emergency bills, or
making emergency repairs. If you find yourself in constant need of taking
short-term loans, then you would probably have to take a closer look at your
personal finances and restructure your expenses if possible.
Another fact that you should know about payday loans is that on the loan's
maturity day, certain fee and interest rate will be added to the original
borrowed amount that has to be repaid. If you decide to repay the loan later
than the agreed date, this could be a subject to higher fees, so asking for an
extension comes with a cost. However, the banks and the other conventional
lending institutions operate in a similar manner and as long as you are
responsible borrower, you could expect to receive excellent service with no
hidden or additional charges. All lenders are required to disclose their terms
beforehand, which should help you decide if you want to take the loan, and the
application process is free and you could apply any time you wish without any
strings attached.
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