Payday loans are designed in order to cater to short-term finance needs. Did you know this fact? It is a way to come out of trouble but for a short-term. If you think it as a long-term option you are doomed. They are a quick option when faced with surmounting financial pressure, in order to buy time for making alternative arrangements. You can say they are stop-gap arrangements.
The interest rate of payday loans is not less. Only opt for payday loans when no other options are there. While taking the loan eventually you should be aware of their basics.
- Loan Term Knowledge – Payday loans have very short-term. Only a few weeks at best a month credit will not pinch you. The advantage is that you will get instant cash credited to your checking account. However be careful of the high interest rate.
- Interest rate – There is no point calculating the annual rate. If you calculate what you are paying monthly well it is 6 percent minimum. When calculated for a year it is at least 300%.
- Delay in Payment can be deadly– Not paying for a long time will definitely cost you. You might have to pay 3 to 4 times the principal. So be aware of this fact
So if you are looking for short-term option payday loans can be great. But for long-term it is a big No!