When you are facing a financial problem the next payday seems far away. The options you are left with are very limited too. For example, you are in need of a $500 and you have no one who can lend you this amount. No friend or relative is helping or in a position to help. And you cannot go to the bank asking for a $500 loan. Because it takes a lot of formalities to get your loan approved by the bank.
At such times, payday loans are the best solution to go for. You do not have to go around the place to get your application approved. You can easily get the money that you will need to pay on your next payday.
Online Loan Finder
The best thing about payday loans is that there are online loan finder platforms. So you do not have to run around the place with your application. All you need to do is to contact them online and you will get the amount in your account.
The maximum they take is a day. All you need to do is to provide them with all the required documents online and your monthly payment record. This will let them determine whether to approve you and on what conditions.
One such online payday loan matching service in Australia is vivapaydayloans.com.au. They offer an honest and transparent loan system. In addition to this, their repayment system is also quite flexible. And the best thing is that you can get the loan even if you have bad credit. They claim to understand your situation and will let you have the amount during emergencies.
But again, all of this will happen under their conditions. The amount you want and your credit history and for how long you are taking the loan. They will consider these factors before deciding on the interest rate.
So what is the maximum amount that you can get?
Usually, payday loans are for smaller amounts like 500 or 1000 dollars. Most of the lenders offer a maximum of 500 dollars amount. However, this also depends upon the lender. So if the lender offers a maximum amount of a few thousand, he can. Some even offer a maximum amount of $5000.
The borrowing conditions of payday loans are surely different from others. Firstly, other loans are for higher amounts and you need to repay them after a few months or years. Moreover, you can extend the repayment duration to a few years too. This is because the amount is usually in tens of thousands and not just a few hundred dollars.
On the other hand, payday loans are for a small amount usually 500 or 1000 dollars. Therefore, you are supposed to repay the amount in a few weeks. Usually, the time is two to three weeks. In addition to this, you need to pay the whole amount in one go and also the interest rate. There won’t be repayment in installations.
However, if there is a lender who is willing to offer a maximum amount of $5000, his conditions will be different. So he can allow you to repay the amount in a few months. Thus, you will have more than a month to repay the whole amount.
Interest rates for payday loans
Because the loan amount is low and you will get it quickly, the interest rates are usually higher. Usually, lenders charge you depending upon your credit history and your credit score. Therefore, you should expect a minimum of 10 percent interest rate for a payday loan. So if you are getting $500 until your next payday, you will repay them a total of $550.
Other options like personal loans charge a lower interest rate. But again, they decide the terms according to your credit score and history. If you have a bad credit score, you will face rejection from most lenders.
However, this is the good thing about payday loans that they give to even people with the bad credit score. That is why it is so handy and popular.
Usually, you are supposed to repay the whole amount on your next pay. However, if you do not have enough amount in your bank account and you choose to roll the loan over to your next pay, the interest rate will change again. This will add more fees and interest to your payment.
Therefore, if you are applying for a higher amount like $2000 or more, you need to be very careful. Because you might end up in a trap. It is usually said that you can return the borrowed amount but you can never return the interests. They keep getting higher and higher and you feel like drowning in them.
Risks involved in payday loans
Although this is the quickest and easiest solution for your emergency situations but you should know the risks too.
- The most important thing for you to know is that there are usually hidden fees by many lenders. So make sure to check that before applying for the loan.
- The interest rates are usually higher than other loan types and therefore, you end up in a difficult position. Furthermore, the interest is separate from hidden fees. Most lenders tell you about the interest rate and no hidden fees. Therefore, you will end up disturbing your whole credit score just because of a small loan amount.
- If you fail to repay the whole amount on the decided date, you will get a fine. This fine amount will also put a burden on your bank account. So make sure you apply for the amount that you can repay on the decided date. Otherwise, the roll-over option will roll the roller upon you.
It is important to look for other options before applying for a payday loan. You should get it only when you are under serious circumstances and you do not have any other option.