Budget planning is a tedious
Budget planning is a tedious and time-consuming work and not all can handle it. Life always has place for unexpected expenses. As a result you have to deny yourself pleasures or be on friend’s or parent’s loan. Now there is a perfect alternative – to get a payday loan.
A payday loan is a short term borrowing bound to borrower’s salary day. Payday loan bases on information from borrower’s place of employment and payroll accounting. Initially the process was carried out in payday lending stores. Borrower used to write out check with full amount of the loan in security for lender. When the borrower fails to repay the loan, the lender redeems the check or applies to the bank. The bank may assign additional fees or increase interest rate.
Now the process is expedited as short-term loan can be taken online and required documents send by fax or e-mail. Cash withdrawing is made automatically from direct deposits on borrower’s account.
General conditions are full age, regular place of employment, income and current account. Payday period can be prolonged for extra payment to the creditor.
It’s not cheap to take short-term loan due to high rate of interest and short term to pay off the loan although in some situations it can come in handy, e.g. car accident, unbudgeted medical expenses, damages for fire loss, other unexpected financial or legal consequences.
Variants how to get the loan:
Bank credit – small loan is a real problem. Small cash loans are available only in some small unpopular banks. Searching for such kind of bank with favorable terms will take time so to wait for payday seems easier and quicker.
Overdraft – short-term non-cash loan extended in cases of deficient amount of finance on bank clearing account. This short term loan allows buying things, paying bills and services on credit. The only condition is to have bank account and advance agreement with it. The main drawback of overdraft considered to be immediate cash withdrawal after salary payment.
Credit card – is a simple and practical way of systematical bank loans. Credit card allows either fulfilling noncash settlements or withdrawing money from ATMs within the set cash limit. Credit repayment is done within strictly set limits, once a month as a rule. Month payment amount depends on the spend sum of credit money. The main drawback of this loan service is cash flow control on the account. Inexperienced user can easily get into a mess and often immerse in debt. Moreover, credit card triggers unnecessary unbudgeted expenditures.
Collateral loan – is a quick way to take short-term loan with minimum package of documents. The main condition is that you’ll have to part with some of your property. So if borrower gives in pledge his car, it’s owned by creditor till debt liquidation.
Microfinance organization loan – it combines the features of bank and collateral loans. This short-term credit requires minimum set of documents and the decision on loan is made in a few minutes. The borrower has the possibility to use his property in gage which is very convenient. Micro lenders have higher interest rates than bank rate; however it’ll unnoticeable with payday loans.
Advertising campaign is focused on the target payday loan borrower – white 25-44-year female. Now borrowers get a pay day loan not only for unbudgeted expenditures but to cover general living expenses.
Anyway, at first all available variants with all interest rates, loan fees and other credit costs should be compared before making a decision. Payday loan can turn out to be too expensive, especially with payment rescheduling and additional fees. That’s why plan of savings is very important on this stage as it helps you to avoid unnecessary borrowings. In case of some mistake in your budget planning bank overdraft protection comes into play.
Budget planning also includes additional savings building up to create financial buffer in emergency cases. The credit money will be automatically pushed over if the refund isn’t done to the full extent. This fact can affect loan appraisal and cause surcharges. Failure to make payment will be brought to credit dossier. Another fail to pay on time will leave an imprint on credit score and eligibility for future borrowings. If you have already got a payday loan, don’t run into another as it can draw you in spiral of fees. Payday loan must never be used to fulfill the gap between incomings and outgoings. When repayment rearranging or payday loan extending, you should inform your lender as soon as possible. Online payday loans add fraud risk.
Small money loans presume more customer multiplicity inasmuch as spreading money over more borrowers means less risk. Meanwhile, short-term loans easily disguise high interest rates.
Taking a short-term loan is a responsibility, so try to limit the payday loan amount. Borrow in accordance with your next paycheck.