Things Happen Out Of Your Control.
Well, there you are. You’re driving down the road and your tire blows out. Your paycheck is accounted for and you have no idea how you’re going to pay for a new one you are going to have to buy right away. You think “Gee, what now? Plus I need to get an oil change and I need a brake job that I have been putting off.” You think about someone you can borrow from, but you can’t come up with any ideas. So you sit down at your computer and go to a search engine and types ‘Loans”. You find a lot of choices but your credit is not very good and a personal loan is going to be hard to come by. You see “payday loans” and you click on a link to some providers who say “$1000 in 60 seconds” or “Up to $1500 in 5 minutes” or something of that nature. They all mention you don’t have to have good credit and most say no credit check at all. You go ahead and read and it tells you about the interest rates for the loan plus the fee to provide the loan. It’s really expensive and you grimace with pain as you read the rates, but you go ahead and fill out the info on the web page and click submit. Now you did it!
How Much Will They Really Lend You?
Let’s say for a conversation point that you want to borrow $600. After you choose that figure and you get your approval, they may or may not give you that much even though their posting on the search engine said “$1000 in 60 seconds” or whatever. Most of the time you will be offered less, probably $200-$300 if it’s your first pay day loan. After you pay if off or make several loans over time they will gradually raise your borrowing limit. So don’t get excited about getting that $1000 of that is what you are applying for until you fill out the online application.Being a true veteran at making these types of loans, I know.The criteria for approval depends on your job and salary. One thing that is always required is you must have a bank account that you can give them to make their deposits into and their withdraws to get their payments, which are usually every 2 weeks. Also, you MUST have direct deposit for you paycheck. Moving on, let’s just say you are approved for the $600 you wanted to borrow.
How Much Are The Payments?
You knew it wouldn’t be cheap! After all it’s a short term loan and you have to figure most of these companies charge anywhere from a 20-25% fee for making the loan plus interest each each period it continues until paid off. So let’s say you borrowed the $600 I mentioned. It will cost you approximately a $150 fee added to the balance. Now the loan is $750. I wont add the interest in for each period, mainly because they are all different and have their own rates, but as you can see, your $600 will cost a lot more than $600. Most loan payday loans charge you approximately 25% of the balance each pay period. So if you loan is paid back every two weeks if that is what your terms dictated, your payment will be at least around $187.00 plus their interest. Every payment you make brings down your next payment as each pay period’s payment will bring the balance down and then be divided by 25% in this instance.Most lenders do have a minimum payment, so when it gets below a certain balance it will be at least their minimum payment. As you make payments, the balance left over can be borrowed against your loan’s credit limit, so you can borrow again up to that value. Tempting if you live paycheck to paycheck especially. You follow me so far?
A Never Ending Cycle
So you’ve got your loan and your new tire and anything else that you had to have at the moment you got your new loan. Congrats. Now comes the headaches. Every payday your paycheck is eaten until this rascal is paid off. And making things worse, you find yourself needing money again and again and going back to the well. It becomes all too easy. Just go to the website and put in the figure you need and click “advance” up to your limit. They will tell you on your account page how much you can borrow. You can’t ever seem to resist and now you can’t pay your other bills. So you get your wife to take out a payday loan, too. Oh boy. Look out.
What Am I Going To Do Now?
Here’s the problem. Payday Loans are designed to be a short term loan. You should never borrow more than you can afford to pay back in a few weeks. It’s just too expensive. I know easy for me to say right? Wrong it’s easy for me to say because I have been in the same boat over and over. I couldn’t tell you all the times I have been bailed out because I swallowed my pride and had to subject myself to the problems of knowing I would be sorry later, but I had no choice. In today’s economy, I am only one in a million who are the same way. The best thing to do is to try and find a week or two to put all your check(s) back and pay the darn thing off. I know it’s not possible for most of us, especially if you have a big balance or multiple loans simultaneously going on. And if you could borrow from a friend or relative to pay this off, you probably should have done it in the first place when you needed that tire, right? That’s what I’m sure the paycheck loan companies hope. Because you will come back again and again.I feel for you at this point, because there really isn’t a whole lot of solutions to get out of this other than using a possible tax refund, or selling something you own to pay it off.
Something To Try
There are a few things you might try to see if you can get the balance down or paid off sooner other than paying a few extra payments of any amount along the way. You tried relatives and friends. If that didn’t work, try selling something like I mentioned on Craigslist or Ebay. You could also try to get a loan again somewhere, but we know your credit is bad, and that is why you are where you are now.
I found there are several places on the internet where you can buy things and finance them with little or no credit and then make 3-10 payments until they are paid off. Buy a new item that you know you can sell for about the amount you owe, then sell it and pay your payday loan off. The site I use charges no interest and no shipping fee. I even had the items I have bought and then sold right away on an auction site shipped directly from the manufacturer in the original unopened box. These are not secured loans like a car that they can repo so don’t worry.The key is, the new loan will be a monthly payment instead of bi-weekly and just pay it as it comes due each month and it WILL be paid off eventually in 3-10 months or however long you can come up with depending on where you buy something.
I did this and I paid off 2 of my paycheck loans that way. Even if you don’t get the full amount of your payday loan out of the sale, you will be a lot closer to being finished with it. BUT be careful. I did make a mistake once and ended up not putting enough of the money I got from the sale towards the paycheck loan and continued to pay on it and had a new loan plus my paycheck loan. Wow what a mistake. Learn from me. Don’t let that happen. You will have to do the research on where to find these sites that sell with little or no credit and finance the balance.
I can’t mention them here, but I will say musical instruments would be a good place to start.
Paycheck loans are something that can bail you out of a short term jam. BUT please use them responsibly. Some states are trying to ban them entirely. Some states already have. Try never to go above your means and think responsibly. I wish you the best of luck.