There are many ways to get cash when you are in a bind. Methods that are not legitimate should be immediately removed from consideration. What usually remains are financing from friends and family and loans from a bank.
Family members and friends may be facing their own financial issues and bank lending can take weeks or even months. Payday loans are an alternative and they take many different forms.
Though some of us are familiar with a traditional payday loan offered online or in a store, we may not be aware of the debit card version. Some lenders allow individuals to get a payday loan using only their debit card and a direct deposit arrangement.
In most cases, the lender will take the loan repayment amount directly from the linked bank account on the day the loan is due.
Several lenders also provide payday loans in the form of a pre-paid debit card. This card is funded with the loan amount and can be used to make purchases. It can even be used to pay bills to vendors that accept debit card payments.
This is a convenient way for people to get access to funds without having to carry around money in their wallets. They can pay with the debit card and repay the loan directly from their bank account on or before the due date.
Payday loans can be pretty costly due to their high rate of interest. However, the cost is often less than a bank overdraft fee or exceeding the limit on a credit card. In addition, taking out a payday loan does not affect a credit score.
Often within a day of applying, borrowers receive the cash they need to pay their bills or emergency expenses. This fast turnaround time is something consumers appreciate when they are faced with a big expense that must be immediately repaid.
Whether the payday loan is repaid on time or defaulted upon, there will be no impact on the credit score. These loans are not reported to the major credit bureaus. Though this can be a negative thing for people trying to rebuild their credit, it is positive for anyone trying to keep a temporary financial issue under wraps.
The money is provided and repaid discreetly in a short amount of time.
Payday loan fees are about $15 for each $100 borrowed up to $500 and approximately $10 for every $100 borrowed over $500. These fees are quoted as annual percentage rates (APRs), per government regulations. For example, a 15-day $100 loan with a $15 fee is quoted as a 365 percent APR. In reality, the amount remains a flat fee.
Lenders usually allow consumers to take a debit card payday loan of a maximum of 25 percent of gross monthly income. This prevents payday lenders from preying on people with low earnings. Consumers should take out only one payday loan at a time and use this financing only for a temporary emergency, not as a regular source of funds.
Loading ...
{ 12 trackbacks }