When you are in need of emergency cash, a payday loan can be the solution to your problem. Unfortunately, some people shy away from payday loans because of false rumors about what happens when you get a loan. To help you make a sound decision, here are some of the most common falsehoods and the truth about payday loans.
1. Payday Loans Are Expensive
Some people falsely believe that if they take out a payday loan, they could end up paying back exorbitant amounts before the debt is satisfied. This is not true. Payday loans are considered to be short-term, small loans that usually do not extend beyond a couple of weeks to a month. Once the loan is paid back, no other fees are taken from the lender and he or she is usually free to borrow again.
2. Payday Loans Have Hidden Fees
Payday lenders are subject to the same laws and regulations as other lenders. The lenders are required to fully disclose all of the possible fees you could face prior to you signing the agreement. Payday lenders are also required to provide the fees in an easy-to-understand format so that there are no questions regarding what is owed. If you do not agree to the fees, you have the right to not sign the agreement. Some lenders even offer you the option to cancel the agreement within 24 hours of signing it.
3. Payday Loans Will Impact Your Credit Score
An earmark of payday lenders is that they do not perform credit checks before approving the loan. In most cases, simply being employed and providing proof of residence is enough to secure a loan. The only time a loan could possibly impact your credit score is if you do not pay it back. Just as with normal lenders, payday lenders have the option of reporting non-payment to a credit reporting bureau. As long as the loan is paid, there is nothing to report.
4. Lenders Only Loan Funds to People Who Cannot Afford It
Payday lenders are in business to earn money, just like other lenders. By only loaning money to people who cannot afford to pay it back, the lenders would place themselves in a bad position financially. Lenders have markers that must be met by potential customers before a loan can be approved. How much a person earns and the frequency with which he or she is paid is considered before a loan is approved.
The best way to separate the truth from fiction when it comes to payday lenders is to contact one and discuss your concerns. The lender can then help you get started on your own loan so that you can get back on your feet.
To learn more, visit a website like http://www.money4youpaydayloans.com.