Payday loans are quick and easy loans that don’t require a credit check or collateral. In many cases, they will deposit the money into your account within 24 hours. This can feel like a sweet deal to someone who is in a financial bind. But, there are things everyone should be aware of when it comes to these types of lenders.
- These loans are not cheap: Before taking out a loan, you should be aware of what you’re getting yourself into. There is usually an expensive flat fee, plus other fees ranging from $15 to $45. This is more expensive than credit cards.
- Don’t be sticker shocked on payday: The way these loans are set up, they ensure that they get their money first. That’s why you must give them access to your checking account so that the moment your paycheck comes, they can immediately withdraw fees and the principal.
Payday loans should only be used if an emergency has come up.
Check out Part 2 for more information.