Payday loans are designed as short-term bailout loans. You did not know this? It is one of the ways to come out of financial trouble. Some expenses cannot wait and will keep adding on and will make your life stressful. In extreme cases it is better to avail this new financial facility and go on with your life keeping your credit history healthy.
However as I said the payday loans are not cheap. They should be taken only when you are having your back to the wall. Even then you would need to know of few basics of this financial innovation.
- Term of the Loan – These are very short-term loans. A few weeks credit is what they provide. The best thing about the loan is the instant credit of cash. Be careful and payback on time as the interest rate is quite high.
- Rate of Interest – The Annual rate of payday loans? Well it is astronomical. It ranges anywhere from 300% to 1000%. Scary is it not? The loan is designed as a non-secured very short-term loan, so you need to look at it in that way.
- Payment delay – One of my close friends had a very bad experience. She took a loan and made payment after 3 months. A $1000 loan cost her $3000. So deferring the payment is not a good option.
Before you jump on this bandwagon look out for option. This option is good if you can pay back on time, and is being used by many people to make their lives easier. Ferratum has great products which have better features of payments. You would not feel as you are paying back.