Payday Loans

Two Reasons Why You Must Avoid A No Faxing Payday Loan

A no faxing payday loan may look like an attractive option to borrow instant money, but there are several negative factors associated with the same which you must be well aware of. No paperwork, no faxing of documents, no credit checking, instant approval – all these things make this loan program a very lucrative option. If a financial emergency is right over your head, the payday is still a couple of weeks ahead, and you are looking for a way to get instant money, you will obviously be highly tempted to use these short-term payday cash advance programs. But, you are strongly recommended not to follow your temptations that are often not based on information or logic. Keep your head cool and just review the pros and cons associated with the loan before you sign up for it. Payday loan companies advertise the positive sides of these loans in a way that covers the negative sides associated with the same. Following is a brief rundown on the two things that make these loans very risky.

Interest And Finance Charges Are Unconventionally Very High

The first thing that is very important for you to keep in mind is that a no faxing payday loan comes with an extremely high rate of interest. Even that is not all; you are also charged a hefty amount of money as part of additional finance charges in the name of processing fee and others. In general, a $100 of loan can charge you anywhere around $30 to $70 just in the form of interest and finance charges. Considering the very fact that even the repayment period is very short and that the due date is just a couple of weeks ahead, it is very important for you to do a thorough planning beforehand. You must have a readymade plan on how you are going to arrange the required money within just a couple of weeks to ensure timely repayment. Unless you are getting a bonus on the coming payday, your limited salary will make it very difficult for you to pay back $500 for a loan of $300 (just an example). Even if you are sure that you can afford it, you may like to try better alternatives. The alternatives abound; you just have to look at the right direction. You can get a wealth of ideas regarding the same by visiting the section “payday loan alternatives” in the “payday loan” category on this blog.

Harsh Consequences Of Nonpayment Of The Debt On Due Date

It is not just the high rate of interest that makes a no faxing payday loan a risky financing option. The most horrible part begins when you fail to make timely repayment due to any reason. If you are late by one month, you will be charged a hefty amount of penalty charges. Besides that, you will also become liable to pay additional interest of a whole month, which can be a very high amount. For example, if the rate of interest is 300% per annum and you have borrowed $500, you will have to pay $125 extra as additional interest for the 30-day delay. The eventual outstanding balance can even be double of what you initially borrow, all this happens just because of a 30-day delay. Imagine the horror of the situation if you are late by three or four months.

As you can now see the negative side of a no faxing payday loan, you must be very careful with your decision.

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