Responsible Borrowing Leads to Financial Freedom
July 10th, 2009. Published under Loans. No Comments.
When you are strapped for cash and feel like there is nowhere to turn it is important to understand all of your options. Payday loans are a relatively new industry but as such are one of the fastest growing ones.
They have been created to help you get out of financially tight situations to obtain financial freedom. Life is full of surprises.
We cannot always control what comes our way or what will cross our paths. Despite valiant efforts to plan and budget, sometimes things happen that are unexpected.
What if you have $200 in the bank for safe keeping but your car breaks down and you need $300 to pay the repairs. In this situation you have to fix your car because it is the only way you can get to work.
The problem with this situation is we can all relate to as it is all too common. We feel the sting of this unanticipated situation and are concerned about what we should do.
If you decide to forego the repairs then you are without a car. This means you will not be able to get to work and you might lose your job.
But you know you will be getting your paycheck in the next week, so you have to figure out a way to obtain that money right now. You think you could write a check for the $300 and hope they won’t cash it.
If they wait until you receive your paycheck then you could simply go to the bank upon receiving it and deposit the money. That way, you reason, when they cash the check your money will be in the bank.
The problem with this is that they are a company, and companies take checks in every day. So the day you write the check it will most likely be taken to the bank.
When the bank discovers you do not have sufficient funds in your account, you will be charged a bounced check fee. Every bank uses them and they range from $25 to $50 per bounced check.
So on the $100 that you don’t have you will be paying an additional $25 to $50. This situation is really unappealing.
Now is when you should learn about payday loans. Payday loans are short term loans to help you out of these difficult situations.
They are short term so you can pay them off in a timely manner and be on your way. The fee on a $100 loan for two weeks is just over a dollar a day.
This means that if you borrow $100, when the loan terminates you will owe $115. You can then pay off your car repairs and save money instead of missing work or being charged overdraft fees.
Payday loans are exceptionally easy to take out. They are there to help everyone out so no credit checks are performed.
They simply look for a steady income and then you can receive the money you need. They are basically an advance on your paycheck.
When you walk into a payday lender you just show proof of income, which can be a paystub, and then you discuss how much you will be borrowing and how much you will ultimately pay back.
This way you know all of the numbers and there will be no surprises when it ends. When this is discussed in full you write out a check for how much you will owe at the end of the loan’s duration.
This check covers the amount of the loan and the fee attached. The check is dated for the expiration date, so when the loan ends the lender can simply go to the bank and deposit your check.
This will end the transaction so you are done with the loan and do not have to think about it anymore. Because they take the check to the bank upon the loan’s expiration, it is very important that you make sure the money is in there.
This means that as soon as you get your paycheck you should take it to the bank and deposit the money. That way, when the lender takes in your filled out check, they can get the money.
This requires responsibility on your part so you must make sure you will be able to deposit future money before taking out the loan. This will prevent you from any more fees and save you the most money.
When you act responsibly in this matter you can save money and be on your way to financial freedom.
Ignacio Morales moved to the United States from Mexico in 1984 seeking the American dream. He has a masters degree in Finance and has been a consumer advocate for decades. He recommends (http://www.BestPaydayAdvanceOnline.com) for all your payday lending needs.