A staggering 66 million Americans don’t have an emergency fund. That’s about 28 percent of the U.S. population. Many of those who fall into this category are credit-invisible, meaning they have o credit history at all.
Under these conditions, it can be difficult to get a loan in case of an emergency. What if your car stops working and needs immediate repairs? Or your dog gets sick and requires surgery?
If you cannot qualify for a traditional loan, consider alternative options.
Payday loans, for instance, can help you get out of debt and make it to the next paycheck. Even though this financing option is controversial, it can be a lifesaver when you need money fast.
Still not convinced? Here are some common myths about advance payday loans you should stop believing!
Cash Loans Have Hidden Fees
Many customers mistakenly believe that lenders charge hidden fees that make it hard to pay back the loan. This is just a myth.
The moment you request this kind of loan, you agree to specific terms and conditions. The problem is that most people never actually read these terms.
Lenders are required by law to disclose their fees, so they cannot charge you extra unless you fail to pay back on time. To avoid unpleasant surprises, make sure you know what you’re signing for.
Advance Payday Loans Carry High Interest Rates
Payday loan interest rates vary among states, ranging between 33.7 percent in Iowa to 625 percent in Idaho. Arizona, New York, North Carolina, and other states have imposed ceilings on loan prices to prevent lenders from charging outrageous fees.
Even though these rates may seem high, they don’t extend over the course of an entire year like it happens with a personal loan, for instance. Borrowers must pay back the money within a month or two, so the costs are reasonable on short-term.
The key is to repay the loan on time. Otherwise, the fees will add up.
Lenders Take Advantage of Seniors and Low-Income Consumers
Contrary to popular belief, payday loans are not just for seniors and low-income customers. In fact, more than half of borrows have an annual income of $25,000 to $50,000, and two-thirds are under the age of 45.
Most customers who apply for this type of loan are middle-class adults struggling with emergency expenses. No matter your income, you may need money to cover unexpected costs until your next paycheck arrives.
Let’s say you’ve just moved to a new city and have a steady income. You rent a flat and decorate it the way you want. These things can cost you hundreds or even thousands of dollars.
Soon after you take this step, your car breaks down or your laptop stops working. Since you’ve already spent a fortune on rent and home furniture, you may not afford to buy a new laptop or fix your car.
In this case, it makes perfect sense to request a payday loan – you need money and you need it fast.
Are Cash Loans Right for You?
Whether you need to pay rent, manage debt, or cover emergency medical expenses, advance payday loans are a viable option. They can help you get through unexpected situations and make your life easier.
Assess your options before choosing a lender. Read the fine print and make sure you understand the loan terms. Most importantly, don’t borrow more than you need.
Interested to learn more about same day payday loans? Then visit our blog and check out our learning center! We’re here to help you make an informed decision.