Payday Loans

When Can Payday Cash Advance Loans Be The Best Option?

Considering the very fact that even the FTC (Federal Trade Commission) has warned consumers against payday lending, you must be wondering why then there are thousands of websites out there on the Internet that are filled with praises for payday cash advance loans. Well, the obvious answer is that these are the websites that are run by those who are into this payday loan business. They keep telling you about how these small, short-term, easy to obtain, no-credit loans can make the best financing option for you when you need instant cash. But, what they never tell you is that there are some serious risk factors associated with most of these programs. If you are going through cash crunch and need to borrow money instantly, these programs may look like an attractive option, but you must be very careful with your decision. These loans can make the best choice for you only if they charge a reasonable interest rate and provide you an affordable repayment plan. Following is a brief rundown on it.

The Best Loans Must Follow The Rules

Do you know that 16 states have either banned payday cash advance loans or have imposed restriction on lenders to charge a very low rate of interest? If you belong to one of these states and are lucky enough to find such a legitimate lender who offers you, say, $500 of loan at the rate of 30% per annum as interest, it is not a bad deal. But, there must not be additional finance charges. Besides that, the lenders must also be fair in their collection practices. Even if you do not belong to one of these states, your state still has some specific rules and regulations regarding payday lending. The laws have provided you certain legal rights, which you must be well aware of. Make sure that lenders are following those rules thoroughly.

The Best Loans Are The Ones That You Can Realistically Afford

Even if you are fortunate enough to find legal payday loan lenders who follow the laws regarding payday cash advance loans thoroughly, you must still do some basic homework to figure out whether you can realistically afford the loan or not. Is your monthly income big enough to allow you to make the repayment within such a short period of time? After all, the repayment period for these loans is usually not longer than two weeks? Failure to repay on the set due date will attract hefty penalty charges, which will make things very difficult for you.

Overall, payday cash advance loans should usually be avoided unless you are lucky enough to find a very low-rate cash advance, which is quite rare. You are advised to work on better alternatives. These days, many credit unions have also started giving short-term small loans; you may like to try them if you are looking for a way to borrow money as quickly as possible.

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