If you’re thinking of taking out a quick loan and for a short period of time only, payday loans are something to consider. With this type of loan, you normally receive the money straight to a bank account. Ideally, you should repay the full amount (plus interest of course) at the end of one month. This is considered ideal since the extra interest chargeable totals to a cheaper sum because you’re paying it back shortly.
Payday loans can help ease your budget in times of emergencies. These can cover an unexpected expense or need when time is of the essence and you just cannot wait for the next pay date.
You can also opt to borrow for a longer period of time, let’s say, even for 3 months or longer. With this schedule, you can repay the principal in smaller installments. This may be attractive if you do not want to disturb the regular flow of your budget plan. However, be prepared for higher interest payments. You also need to make sure that you meet each installment payment as it comes due. Else, interest charges and penalties will accrue.
We can think of payday loans as short-term advances that help you get through a tight budget until your next payday comes. Some companies schedule your payment on your next salary date. Others give you the freedom to choose the repayment time. The application can be quick and you can very well see your loan deposited in your account within the day. Closing a loan is also simple, the principal amount plus the interest amount are straightly deducted from your bank account.
Advertised interest rates or APRs vary from company to company. Regardless, the key consideration is to determine the amount you only really need to borrow which you can pay back within a short period of time. As with any other loan, the longer you delay settling it, the higher the interest charges will cost you. So, sit down and count the cost-benefit ratios before you take out that loan.