How Much Will You Really Pay for a Fast Payday Loan?


Like your mother always told you, if its too good to be true, it probably is, and this applies really well to anyone applying for a fast payday loan. Just like all of those credit card offers that are stuffed into your mailbox each day, a fast payday loan provider is only going to do one thing: Get you deeper into debt while they make money off the interest.

How does it Work?

They dont call it a fast payday loan for nothing. You can literally walk out the door with a fistful of cash based on proof of employment, personal ID, and a postdated check. But not so fast lets see how much that money is actually going to cost you!

Loan providers arent giving you the money out of the goodness of their hearts. They stay in business by charging you fees for loaning the money, and charging interest for the length of time that you borrow the cash. The Federal Trade Commission estimates that the interest rates on the loan translates into an annual interest of more than 1,000% in some cases.

For example, lets say you borrow 0. The fast payday loan provider charges you a processing fee for a 14-day loan. Sounds reasonable, right? Look at what happens if you do not pay it off on time and, like many customers, have to extend the loan over and over. You will owe the bank an insufficient funds penalty fee when that postdated check bounces. Then youll owe a loan extension fee each time you extend, and then add interest on top of that.

By the end of the year that 0 loan will end up costing you more than ,500. Would you take a credit card that charged that kind of money? Hopefully not - so why are there so many fast payday loan providers?

Then why take it?

Well, these loan providers continue to remain in business because there are a lot of desperate people who make easy targets for advertisements that promise money fast without any big hassles. Just like credit card companies, fast payday loan lenders love to see young adults who do not yet have a real understanding of budgeting or finances.

These companies also attract customers who are already entangled in debt and are having trouble managing their cash flow from day to day. According to the Federal Trade Commission, many clients have a history of using high-risk lenders. Unless consumers start working on re-building their credit instead of looking for quick fixes, these companies will continue to thrive.

You may be eligible for an instant faxless payday loan.

Installment Sales Contract

In order to be eligible for this type of loan you should be able to produce a pay stub or some information that proves your income.

Many loans are available and are fully approved within moments of the application, including many sizeable loans that can be done over the Internet. Ask them for more time or to work with you in devising a re-payment plan. You will be required to sign a contract when you are applying for your loan that agrees to the terms and conditions. Your easy payday loan will be based on your monthly income and other related factors. You have to make at least one thousand dollars a month to be able to get the advance and you have to be at least eighteen years of age or older. One bad check can cost you or more plus what ever the check was worth, if you have check protection.