Saving the Most Money Paying Off Your Debts
July 10th, 2009. Published under Loans. No Comments.
We are told to save our money so when unexpected financial difficulties arise, we are ready. The problem is that sometimes we simply are not prepared.
We have saved and tried to be ready, but sometimes the fee is too great or too many unexpected things happen at once and we do not know where to turn. Taking out a long term loan is an option.
But then you are in debt for a longer amount of time and you want to get out of this difficult situation, not sit in it for the length of a long term loan. In these situations the best place to turn is a short term loan, or a payday loan.
These loans offer low fees in a short time period so you can pay off these troubles in a timely manner. Payday loans are simply loans that allow you to taste financial freedom.
They exist to lift you out of debt. They are generally the best option for immediate financial crises.
If you have to pay off your rent next week but you are running short on cash you have a couple different options you can pursue. You can wait for your paycheck to arrive, but that will be in two weeks, way past the rent’s due date.
In light of this, you decide to just write out a check to your landlord for money that you do not have. You hope that he will not deposit the check until after you can deposit your upcoming paycheck.
The problem is if he does you will be charged overdraft fees. These fees range from $25 - $50.
You decide this is not the most appealing route so you turn to just holding out on your rent. If you can push the due date back one week then you can pay it off with your paycheck.
The problem with this is that there is no way your landlord is going to push the rent back. He has numerous tenants all asking the same thing and he has made it clear this is not an option.
Realizing this you decide you will simply just hold out on the rent and pay it in a week. Although you would like this to work out, the problem is he will charge you late fees.
These usually are a percentage of your rent. So if you are paying $500 a month in rent, then a 5% fee would mean $25. Even worse, a 10% fee would mean $50.
When this type of situation arises, the best option is a payday loan. On a $100 loan, the fee is a little over a dollar a day.
This means that if you borrow $100 to pay off your rent, in two weeks you will owe $115. If you borrow $200 then you will owe $230 and so on.
This option clearly saves you the most money if the loan is small and you want to be free from the financial debt. Taking out a payday loan is a very simple process.
All of the fees are discussed upfront so there are no surprises when the loan expires. When you walk in and they discuss your loan, they will ask for proof of an income, which can simply be a paystub.
Upon showing them this, you write out a check for how much you will owe upon termination of the loan and then date the check for when it ends. This means when the loan is up, the lender will deposit your check.
It is for this reason it is very important to make sure there will be money in the bank when they deposit the check. As soon as you get your paycheck you should deposit it and leave it in your account so when they deposit your check, no more fees will be incurred.
Taking out any kind of loan requires financial responsibility. It is important to understand how much you are taking out and how much you will owe when that loan expires.
Taking out a loan places you in debt, so you should only do so for specific needs. The lending institution exists so you can get help during times of difficulty.
They want to see you succeed. In order for this to happen, you should make sure you are taking out a loan not just for wants but for actual financial needs.
If this is the case, then both you and the lender can benefit from the transaction.
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.