Breakdown Of Utah Payday Loans
Unforeseen financial burdens happen to everyone. Sometimes, no matter how much we plan, an emergency can come out of nowhere and we’re left with the bill. In times of financial need, many look towards long-term financial solutions. Often, this refers to loans. In the United States, there are various types of loans, each with its own set of requirements and regulations. For a relatively small amount of quick cash, between $300-$1,000, many opt for the payday loan.
What is a Payday Loan?
Payday loans are a type of bad credit loan, meaning you don’t necessarily need good credit to qualify. While payday loans are not explicitly defined and are subject to variation, they generally refer to a loan that is usually short-term and high cost. High cost refers to the annual percentage rate (APR) of the loans which in this case, can get up to 700%. However, because these loans are short-term the APR doesn’t have much time to build up. Generally, borrowers often use their payday as a due date to repay the lender, hence the name payday loan.
How Do Payday Loans Work?
Payday loans can be accessed in one of two ways, an online payday lender or a physical branch of a financial institution. Depending on which state you reside in, there are different laws that dictate how much money you can borrow, and how much interest the lender can charge. Once approved for the payday loan, the repayment process begins. Most lenders request the payment to be made in full and within 14 days, or the next pay period. Some lenders even require a postdated check so they can pull the money from a checking account by the date indicated.
How Much Do Payday Loans Cost?
Because payday loans are high-cost, the APR associated with loans can look alarmingly high. But because these loans are short-term, if you pay the amount back on time, the accumulated interest isn’t too daunting. Typically, payday loans cost $15 for every $100 borrowed. For a 14 day or a 2-week loan, that’s a little under 400% APR. However, if you fail to repay the borrowed amount on time, the APR will continue to increase and you’ll end up paying far more than what you originally took out.
What If I Can’t Pay Back My Payday Loan?
Aside from the APR continuing to compound, not paying back your payday loan may lead to other consequences. The most obvious is the amount you’ll need to repay will be far more than what you originally borrowed. Depending on your lender and where you live, you may be charged extra fees. These include a late fee, a nonsufficient fund fee, and even a bank fee. Additionally, failing to pay back a payday loan can have an impact on your credit score. While some lenders have a rollover option, it is best to pay your lender the full amount on time.
What Do I Need to Take Out a Payday Loan?
Payday loans are a good option for those who don’t have the best credit. In order to take out a payday loan, you must be at least 18 years old, have an ID, active bank account, and proof of income. This could be a bank statement or a pay stub. Additionally, some lenders will ask for a Social Security number. However, this is not foolproof. You may still be rejected even with meeting all the requirements. Depending on where you live and the lender you choose, there may be other restrictions for taking out a payday loan.
The Difference Between Nice Guys and Typical Payday Loans
Perhaps the biggest catch in taking out a payday loan is having to repay the entire amount by your next payday. In life, unforeseen situations come up all the time. And sometimes, paying back that entire loan with your next paycheck is just not feasible. Nice Guys offers short-term online installment loans that make the repayment process much easier. Instead of the total amount being due at your next pay period, you can stagger the payments in installments.
To get approved, you apply online and one of our customer service representatives will generally get back to you the next business day. Once approved, you can choose how long you want to pay back the loan, up to 7 months. These payments can be split weekly, bi-weekly or monthly, and will typically match your paydays. Not to mention, Nice Guys offer lower interest rates than any others on the market. If you’re looking for a lender in Salt Lake City, Utah that understands your situation, give Nice Guy Loans a call!