However, this practice ignites some controversy, even considered as an illegal activity in some states or countries. Workers usually take payday loans a day until couple of weeks before they receive paycheck, due to some unexpected expenses that required some cash at hand. In such short term, the fees of this cash advance span between 15% - 30% from the borrowed money.
If we look it from that angle, the fees look ridiculous. Some even say that this only draining money from low-income communities, the ones who usually need this payday loans the most. The truth is, there're couple of things that need to consider about this paycheck advances:
1. The lender really need the high-fees to operate
Remember that payday loans are only for short-term. A few states have passed legislation capping the annual interest rates on payday loans at 36 percent APR (annual percentage rate). Even the most legitimate payday lending companies cannot operate under such low rate caps because payday loans are two-week loans and cannot be offered at the same APRs as annual credit products. At a 36 percent APR, the total fee charged on a $100, two-week advance would be $1.38. Payday advance lenders could not cover the cost of originating a loan, let alone meeting employee payroll and other fixed business expenses.
2. Fees from bank also not that low
Maybe you want to consider borrowing from a bank instead, but remember, payday lends are for cash and unexpected situations. Let's say you have $200 in your bank account, and you pay $250 for repairing your broken car using your debit card. Most bank will charge you with up to $35 for every overdrawn transactions from your account. Meaning, you need to pay $35, when you're, in fact, only need about $50!
Well, whatever people think about this service, payday loans is still necessary, and it's up to the one who need it the most to decide whether it's useful or not. Anyway, if you want to try it for yourself, consider using online payday loans, especially the one who provide 'no credit check' facility. With this feature, you can fill all the requirements via online forms, and the money will directly deposit into your bank account.
Disclosure: This is a paid review sponsored by payperpost.com