Tuesday, February 19, 2008

Bridging the Cashflow Gap

A payday loan is a small, short term loan to cover the borrower's emergency expenses until his or her next payday. It is meant as a temporary loan secured against your future pay check. These days the loan amount can get as high as $1500 deposited to account as quickly as the next business day if you qualify. Since payday loans also known as cash advance is for short term purposes, the interest rates are generally high at the range of 390 percent to 780 percent APR (annual percentage rate) for a two week term. Although different states in the USA regulate payday loan laws differently, in October 2006 the United States Congress passed a law that caps lending to military personnel at 36% APR.

Online application is simple and quick. The typical requirement are receive income or salary regularly, earn at least $1000 per month if you are employed or $800 per month of fixed income and have a direct deposit enabled bank account.

Whatever your circumstances, you should treat loans responsibly and pay it back as soon as you can. If indeed some unforeseen situation comes up and you can't repay your loan, try to approach your payday lender for advice and keep them in the know. You may be surprise that they will be more than willing to help you or offer you some suggestions rather than you getting more loan and spiraling into a cycle of debts to settle the existing one.

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