The olden day’s proverb Haste makes waste is becoming meaningless these days. All the work is done hastily. There is no time to waste waiting. This is applicable even for getting loans. There is literally no time for any person to apply for loans and linger for days together for the loans to be sanctioned. People opt for some simple and fast ways to get the loans. The current markets have every way possible to satisfy the clients from all the angles and of course they do it for their profits also.
Though there are many ways to get loans from the banks, modern pay day loans are the most commonly used way to get quicker loans. Pay day loans also known as pay check advance or advance pay day is an instant way to get a loan as the credit checks are not done before lending money. These loans these are available in retail lending and internet lending for easy accessibility for the clients.
Normally the loan amount is less for a small period of time. The amount could range from $50 to $150 for a period of two to three weeks. The key factor in determining the loan is the interest rate for this principal amount. Since the loan period is less, the interest rate is high for pay day loans. Analysing the interest calculated by the firm prior to getting loan from the company can help to save a lot of money and nerves.
The pay day loans concentrate only on the client’s bank information, his occupation and in the identification proof rather than asking for the credit details to lend the loan. The pay day loan lenders are only interested in confirming the repayment of the money lended. The amount of money that can be borrowed depends on the above details furnished by the client. Once the details satisfy the pay day loan company the loan amount can be obtained the same day.
The client has to deposit a post dated cheque for the repayment of the loan which includes the principal amount along with the interest amount before the loan acquisition. This confirms the loan repayment. If the repayment is not possible on the date the client had mentioned, then a fine for non repayment of the loan and the fees has to be paid by the client which is very exhaustive.
In order to prevent any such calamities, the person has to perform a complete ground work on the interest rates and the fees calculated by the pay day loan companies. The easiest and most effective way of calculating the interest is by calculating the APR (Annual percentage rate) of the pay day loan company. By multiplying the number of pay periods with the pay day loan fees can give the approximate number of times the interest has to be paid to the company before finalising the principal amount. This value can serve as a tool to decide whether to take the loan from that company.
Pay day loans are more useful for the lower and middle class people who are self employed. Very low interest rate loans are widely available which are very easily accessible to all. Online pay day loans have made it very easy to apply and quicker and easier to process. There are many finance companies that are available online, on the internet that does the online transactions. These companies provide pay day loans when the client provides the last few months bank statement to the company as a proof of his income.
Pay day loan can be a complete rescue when some amount is needed in emergency. Pay day loans are the bless in disguise when the amount is repaid to the company in time. On the other hand if one fails to repay the amount in time it can shatter ones nerves with the amount of fine plus the interest plus the fees. It can be mind boggling. Proper analysis of the interest rate and APR can serve to help save the unwanted money wastage.