Payday loan companies will differ from state to state, and from company to company. One thing that determines how a payday loan will be is the state regulations. Regulations on online payday advances have not been clearly defined in most states. This is one of the reasons the interest can be so high on these types of loans. The companies are not held to the same parameters as your regular loan. It is partly due to a loop hole in the fair lending practices in which payday loan companies insist they are not like a bank or regular lender. Another reason is that there is a regulation that was passed that negated the above 30 percent law. The law stated no loan or line of credit could be above 30 percent, but in 2000 another law changed this allowing for interest to increase.
Based on the differences and the laws that are in effect one must be careful regarding online payday advances. For example you have a couple of options when it comes to the loans. There are some companies that will award you money within an hour, even if you have bad credit. Their process is to take your information online. They examine your bank account, employment, age, and how much money you need. They will then process the application in an hour and direct deposit the money.
This type of online payday advance will come with a fee which can be up to 30 percent of the amount you borrow. You also have the hefty interest if you do not pay it back in a timely manner. The longer you have the loan the more you will spend in interest just like any other line of credit. The difference is the online payday advances can be upwards of 300 percent.
There is a word of caution that should be administered here. Some payday loan companies are scams. One very large scam is the one hour online payday advances. They may even advertise $1500 can be wired to your bank in an hour, with instant approval. It sounds pretty good, right? Well, there is always a saying about things that sound too good. It usually means they are not. One hour payday loans are not going to be good. They may advertise high amounts of funds, but you are either hit with a huge interest rate or a scam.
Not all online payday advances are scams. There are some legitimate companies out there. You will need to do research to find out which companies can be trusted. You want to look at how they are giving you the money. Are they promising you a high amount of funds in a short time period? If so, the company should be avoided. Are they offering what seems like a magical fix? A lot of payday loan companies look like a magical fix until you read the fine print.
The fine print on a payday loan is just as important as your credit card. Once you accept the money you are held to that fine print. If you are unable to pay the money back or if you have to take more than the allotted time frame you will find out how expensive the loan really is.
Careful research of online payday advances should include user reviews. Take the reviews lightly, as many online companies tend to add their own reviews to the site. They may get consumer reviews, but they may also pay a writer to create a review of the site to help gain your interest. A true site will have both negative and positive information regarding the payday loan company.
At the end of your research if you are not satisfied with the companies you can try for an unsecured personal loan. The unsecured personal loan is without collateral. Some banks and other lenders are willing to lend to those with bad credit in the form of an unsecured personal loan that works as a debt consolidation loan.
You would be able to take some of the debts which are hard to pay down and envelope it into a loan, which would also free up a little money and use less interest in a year. Like payday loans debt consolidation is not a magical solution, but it can help given a tough situation with your finances. The loan is also a better option than the high interest rate payday loans.