How to Survive Personal Financial Troubles
July 10th, 2009. Published under Loans. No Comments.
In a time of economic turmoil many are finding themselves in a state of personal financial troubles. This is magnified when unanticipated situations arise and we have not planned them into our budget.
When this happens we are faced with various options that position themselves as solutions to our problem. Despite their seemingly good outcomes, it is important to understand the ramifications of all your options.
Payday loans were created for situations like this. They exist to help people out of difficult financial situations that must be overcome.
Our personal financial situation dictates how happy we are in all the other areas of our lives. Because of this, when we are facing a troubling financial situation, it is better to quickly get out of it rather than put it off.
Also, when we put some of these unexpected debts off, they increase because the interest accrues. So if you are facing a bill that you have to pay off by the end of the week, like rent or your cell phone, but your car broke down on Tuesday, you have to figure out how to pay off all of these things and in a timely manner.
One option available to you is to hold off on paying the bill. You can simply choose to not pay it until your next paycheck comes.
The problem with that is it will cost you a substantially greater amount and it could affect your credit. Being late on your rent usually costs a percentage of how much rent you pay, and that percentage is anywhere from 5% to 10%.
This can be a significant number based on how much you are paying in rent. It is then understood that in choosing this option you will ultimately owe a substantial amount of money; much greater than the expense originally would have been.
Another thing you can choose to do is write a check and hope your landlord or the company will not deposit it until after you are able to deposit your upcoming paycheck. The problem is the company and your landlord are most likely going to deposit your check immediately.
When they do, and it is discovered there is not enough money in your account to pay off the check, you will be charged a fee from your bank. This fee ranges from $25-$50 per check.
In choosing this option you will then be paying this much in addition to every bounced check. In these situations it is important to understand what payday loans are and how they can help.
Payday loans are cash advances that are available to anyone with a steady income. On a $100 loan the average fee is just a little over $1 a day.
This means at the end of two weeks on this loan you will be paying just $115 back to the lender. Depending on the size of your loan, this could save you the most money.
Payday loans are under great scrutiny because they have a very high annual percentage rate, or APR. This number is so high because they are short term loans.
You pay them off in such a short amount of time that the only way for them to be profitable is to have a high APR. Banks and other institutions have lower APRs but this is because their loans last a lot longer.
This allows them to make a lot of interest in the long run. Taking out a payday loan is a very simple process.
You simply walk into a lending company and they will discuss with you all of the fees upfront. Upon understanding what you will be borrowing and how much you will ultimately owe, you write out a check for the total loan plus the fee.
The check is dated for the future time when the loan expires. In this way you know exactly how much you owe and then when that day comes they can deposit your check and the transaction is thus finished.
Because you write out a check for how much you will owe, it is very important that you make sure the money is in the bank at that time. This means that you should only take out a loan if you are sure you will be able to pay it off, so you should have a steady income.
When you receive your next paycheck make sure you deposit it so when your payday loan check is cashed you and the lender both benefit.
Roger Pedactor is a financial guru. He has spent the majority of his life writing articles to lend a helping hand to consumers all over the U.S. He recommends (http://www.PaydayLoanZone.com) for all your payday lending needs.