Pay day loan business
Early in the morning, your little one reminds that his school fee is due and it has to be paid in just two days. Your pay day is some one week away and you do not have enough money to pay the fees .
You receive your utility bill something more than what you have kept aside for it and you don?t have money to pay the extra bill !
You suddenly had a small collision in the traffic and small repairs have to be carried out for which you are in need of cash for just few days.
Your father\\'s tooth ache has increased and you have no insurance done for him. You need to shell some $300 in the middle of the month but you don\\'t have that amount with you.
In all the above cases, you need to arrange finances failing which your mental tension starts taking a ride on your health. But, how will you arrange these finances. Simple! Through the payday loans which have increased a lot these days and many others are also taking advantage of these loans .
Pay day loans are cash advances from financial institutions for meeting unexpected fast cash requirements and are usually processed within 24 hours of request. i.e. if you request for a cash loan before 5 pm CST today, you can access to your loan after 9am CST tomorrow. These loans are usually disbursed for a period of some 10-28 days and the due date falls on your pay date which falls between these 10-28 days. If your pay date does not fall in between the 10-28 days, then the due date would be as informed by the financial institution from which you have taken a loan .
The amount of the cash loan ranges from a minimum of $100 to the maximum of $1500 and there are certain state regulations regarding the number of loans taken up and the maximum amount of loan to be taken up .
For example, if you take a custodial loan in Illinois for a period of 45 days and repay it, a fresh loan can be applied for only after a cooling period of 7 days. That means, you can again apply for a fresh loan only on the 52nd day and your loan would be processed on the 53rd day. Also, at any given time, you are eligible to take only two outstanding loans.
In Alabama, there is no such restriction as to the number of loans that can be taken up but the maximum amount you can apply for a payday loan is only $500 .
In Oklahoma, the maximum amount of payday loan to be taken up is only $500 along with a restriction that only two loans can be outstanding at any given time.
In the same way, many other states have also regulated their laws to ensure that people do not overspend just for the reason that they are provided with the payday loans. Payday loans are meant only for meeting contingencies so that you may be saved from those interest charges and penalties which would be applicable if your urgent requirements are not met. As such the APR?s are also cheaper than the penalty charges usually charged for default of payments.
Different states offer payday loans with different APR?s depending on the development of the state etc . In a well developed state like Montana the payday cash loan is available at a flat APR of $25 per every $100 taken irrespective of whether it extends for 10 days or 28 days.
In Alabama, every $100 costs $17 .50 flat from 10 ? 28 days. Whereas in Wyoming, every $100 costs $9 .03 on the 10th day, $9.68 on the 11th day and thus the APR?s are calculated on a pro-rated basis.
Other than the state regulations, there are some general regulations regarding the terms of loan:
The due date of your cash loan falls on your pay date which falls between the 10-28 days. If your pay date does not fall between these days, then the 10th day only becomes the due date at times unless agreed upon earlier.
If you are presented with a check, then a grace period of one extra day is given so that you cash the check in your bank.
All payday loans should be repaid on the due date and if you are intending to extend the loan, the same should be intimated to the payday loan institution at least 2 business days (before 5pm CST) before your due date failing which collection procedures would be initiated on you and future loans from that company would be just impossible for you.
There is also one more option of pro-rated refund of the APR in certain states provided you repay your loan before the due date.
If you have just repaid one payday loan, then you are eligible to take a further loan within two days of your repayment and the same earlier terms again apply.
Owing to the convenience of fast cash and simple terms in addition to no credit ratings, the payday loan business has spread far and wide in full America. Even well to do people just ease their cash emergencies are now approaching payday loans instead of facing the embarrassment of taking up hand loans from their friends and relatives. But, if you think of the APR?s being charged by the institutions, they amount to around 1/6th of the loan taken by you on an average. That means you would have saved that 1/6th amount if only you would have planned earlier of that short term cash requirement.
For any unforeseen contingency, it is well advised that you maintain a minimum cash balance of $200 in your house and if your requirements exceed that balance, it would be more meaningful if you could try for interest free loans from your friends and relatives rather than approaching those institutions. For such prudence, you need to plan your financial requirements very calculatedly and at the same time maintain good relation with your fellow beings. These little things if were followed from earlier times, better relations would have prospered rather than these payday loan businesses.
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