Payday Loans - Beware of High Interest Rates
Payday loans are a choice that many Americans are forced to make when they find themselves in an emergency financial situation. They are not for everybody and can come with high APR's. The poor go to them quite often, so they may not really be a great way to borrow money, but they do serve a purpose.
Here is how they work.
Before you apply for a payday loan there a few things that you need:
The interest rate will be about 25%. But if it is annualized it could be as high as 400%. That is why local governments and officials heavily regulate this industry.
If you are in a financial bind, a payday loan maybe your only choice. Just make sure that you have an exit plan and can pay it back two weeks later. Or they will take the money anyway and that may make your other bills late too. It's a vicious cycle, so borrower beware.
Here is how they work.
Before you apply for a payday loan there a few things that you need:
- A steady job
- Make about a thousand dollars a month
- A checking Account
- Be a citizen at least 18 years of age
The interest rate will be about 25%. But if it is annualized it could be as high as 400%. That is why local governments and officials heavily regulate this industry.
If you are in a financial bind, a payday loan maybe your only choice. Just make sure that you have an exit plan and can pay it back two weeks later. Or they will take the money anyway and that may make your other bills late too. It's a vicious cycle, so borrower beware.