The main advantage of payday loan stores is that they offer
unsecured loans to customers who are faced with sudden and
unexpected extra costs. The money can usually be obtained
quickly and without the need to jump through bureaucratic hoops.
Most of the time a poor credit history won't hold you back and,
as long as you have proof of a steady job with a regular income,
you can enjoy the services of a payday loan store.
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The Risks of the Rollover
Payday loans are intended to be short-term, emergency solutions
to a customer's financial problems. Although there are
safeguards to prevent payday loan companies from preying on
those who might be in deeper financial trouble, individuals must
take responsibility for themselves as well. If a debtor reaches
the end of the repayment term and he or she doesn't have the
money to pay it back and another option cannot be agreed, the
debtor usually has to pay off the flat fee, extend the term of
the loan and incur extra fees. Unfortunately, the flat fee
accrues high interest, sometimes up to 1000%, thus increasing the
overall cost of the loan often beyond the means of the debtor.
It may become impossible to pay off, creating
bad credit history, stress and possible legal proceedings. If you can seek
cheaper, alternative ways of settling what you owe that doesn't
involve high-interest rollovers, then you should opt for that.
Watch Out for the Small Print
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Payday loan companies may offer to increase the amount of a loan at any time, so try
not to get tempted by this as the costs could spiral beyond your
ability to pay them back. Make sure you establish the term
deadline and stick to it. If you are able to pay off the full
amount on time then let the payday loan company know this before
they automatically roll the loan on.
New Technology Makes Life Easier
New technology has assisted the industry enormously. Tools like
Teletrack, which can trace online an individual’s financial
history, have reduced the risk. Banks have jumped on the
bandwagon by funding many of these smaller loan companies and
helping them to expand their operations. The internet, though,
has been the frontier that has most assisted the industry,
allowing anyone with web access to quickly and conveniently
apply for loans.
Conclusion - Enjoy the Pros but Watch out for the Cons
In conclusion payday loan stores offer a very useful service. If
you need to borrow a small sum of cash for a short period of
time this is a very viable option no matter your credit score.
What customers have to do to get the best out of their payday
loan is to make sure they are apprised of all the terms of their
loan and are able to repay the loan amount in full on the date
it is due.