Payday loans are the other name of short term loans and it is cash term which will help you in your tough times. In order to get the payday loans, first you need to prove you have enough income and a bank account. The drawback of payday loans is that they can charge you high interest rates, and the Federal Trade Commission recommends considering them only as a last resort. Here are the steps to get payday loans.
Getting the Loan
The standard term of a payday loan usually is two weeks. Say you want to borrow $100. The payday lender asks you to write a postdated check for that amount, plus a loan fee. These fees vary by lender, but $15 per $100 borrowed is common. So you write a check for $115, and the lender gives you $100 cash and holds onto your check for two weeks. Alternatively, the lender directly deposits $100 into your checking account, and you authorize the lender to deduct $115 from your account in two weeks.
Repaying the Loan
After two weeks, the lender deposits your $115 check, or directly deducts $115 from your checking account. Now the loan is settled. However, if you don’t have the money in your account to repay the loan — and many people who resort to payday loans do not — then you can renew or “roll over” the loan. That means getting another two weeks to repay, for another $15 fee.
High Interest Rates
Payday Loans can charge a high interest rate and it’s a $15 fee for borrowing $100 looks like 15 percent interest and it’s a very high amount. But in lending money, interest rates typically are expressed in annual terms. A 15 percent interest rate for two weeks to an annual rate of about 390 percent. That’s far higher than you would pay for, say, a cash advance on a credit card or a personal loan from a bank or credit union.