The car stops on your way to work and won’t start. You just had an accident at your home, but your health insurance defaulted a month ago. Your fridge broke down and a replacement is necessary. Your dishwasher, laundry machines, and the list can go on of what could break down and suddenly you are in need of extra cash. When you live paycheck to paycheck it is hard to replace items or cover expenses in an emergency. It can make getting a loan necessary, but many lines of credit like a second mortgage or personal loan take up to a month to secure. It is hard to wait for certain issues like a car that you need to get to work.
If your home has no equity than it is even harder to get a second mortgage; however, a payday loan could be the answer depending on your situation. A payday loan has to be paid back in 14 to 30 days. It is all based on when you get paid. A loan like this will have a fee and interest. The interest can be anything from standard loan rates up to 1000 percent APR. The higher the APR the more you payout on the periodic rate for the short period you received the loan for. Most payday loan companies charge up to 25 percent for the administrative fees, meaning that if you get $100 you now owe $125 before the interest is attached to that.
If you live paycheck to paycheck with no extra money to cover emergencies it will be much harder for you to pay back the payday loan. However, if it is a matter of having the funds before you get paid again and have enough funds once you get paid then payday loans work very well.
It is best to shop around in order to finance your emergency situation with a payday loan. Payday loan companies work in different ways. One company may charge an exorbitant amount, while another requires a full credit check. Some companies offer you no interest as long as the loan is paid back in full on the original due date. There are also companies out there with a one hour direct deposit option. How this works is you apply for the loan, they look at the application and then send the money direct deposit to your account all within an hour or two. These can increase the fees and interest.
When you finance emergency situations or any other need research is always the key to making it a successful endeavor. Research is always the difference between a bad move and the best situation for you.