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Turn Your Cash Problems Into A Cool Payday

LOANS Turn Your Cash Problems Into A Cool Payday

Many of us struggle to make it through the month without using some form of credit. It’s almost impossible not to. Between emergency expenses that have a nasty habit of popping up at the wrong time or just living slightly beyond our means, credit is often our only option. One of the easiest and fastest ways to get a little extra money is through a payday loan company.

What is a Payday Loan?

A payday loans or short term loans are unsecured, small personal loans offered by a variety of operators to shore the gap between paycheques. These loans are for limited time frames, usually 1 to 45 days, and for small to medium amounts of money, depending on the provider and your history with them.

 

A payday loan is designed to be used almost in an emergency. The sign up process is quick and getting the money is almost instant. This means that if you need money in an emergency but don’t have the luxury of a credit card it can be a lifesaver. Due to the ease at which one can acquire such a loan the National Credit Regulator monitors all payday loans very closely.

 

This means that there is a strict limit on the amount that can be loaned, as well as the period you may take the loan out. The interest rate has been capped at 60% per year, which works out to 5% per month.

How Do I Qualify?

Payday loans are amongst the easiest to get as they are done purely online and have very low requirements. In South Africa you need:

 

•    Over 18 years old
•    Valid ID book
•    Have permanent employment and receive regular income
•    AN active bank account
•    An active cellphone number
•    A valid email address
•    A clean credit report

Costs Involved

 

There a few things you should look at when you consider getting this type of personal loan. The first of those is the fees involved. A lot of the money instant loan companies make is through their fee system. Generally there will be an initial signup fee, which will cover things like a credit check on your credit report. These fees do vary so comparing different products is often a good idea.

 

After the initiation fee there will be a monthly service fee. This is to cover admin and costs related to the loan itself. As a consumer, shopping around for the best deal can often save you in the long term so don’t be afraid to look around before taking the plunge.

Don’t Be Late

The biggest concern people have with payday loans is the fact that late payments are punished heavily. The reason for this is that the loan is an unsecured one, which means the provider is essentially taking a gamble lending you the money.

 

If you are late on a payment the penalties can be extremely high. Extra costs and legal fees can be imposed, not to the mention the heavy damage it could do to your credit report. However, successfully paying back your loan on time and in full can have very positive results on your credit report.

 

This means borrowing in the future would not only be easier but could be an effective way to grow your credit score.

Choose Wisely

At the end of the day choosing to take out a payday loan should be one that is thought through clearly. When deciding whether or not it is a good idea, consider all your alternatives as well as your ability to pay the loan back. Be aware that you are in fact borrowing money from your future and as such should be very conscious that the following month you will effectively starting off with less than you did the month before.

 

These small loans are perfect if you run into an emergency towards the end of the month. Once the decision is made to take out the loan, ensure you pay it back on the day it is due but also budget the following month effectively so you do not end up in a permanent cycle of borrowing money.

 

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