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7 things you need to know before applying for USA payday loans

You need to consider the costs and benefits before applying for USA payday loans. These short-term loans can help you to raise cash quickly to deal with emergencies or unexpected bills.

Does it make sense to apply for a cash advance? This article will help you to decide. These loans can prove to be very costly if you take them several times a year and don’t return the money on time.

Take short-term loans only when you have urgent requirements and can’t raise the money from other sources, such as your family, friends, credit union or bank. This may not be the right option if you’re facing a persistent shortfall of cash.

If your finances are in poor shape, think carefully about whether you can afford to take another loan. Can you pay it back on time from your monthly budget? Seek advice from someone you trust before you decide to take a short-term loan. 

1. What is a payday loan?

A payday loan is a small, short-term loan which is due to be paid back on the borrower’s next pay day. The loan is usually for $1000 or less and it has a very high interest rate. These loans are also known as cash advances or check loans. 

You may have to allow the lender to access your checking account or provide a check for the entire balance amount in advance. This will give the lender the option of recovering the loan on the due date.

The lender may provide the loan amount in the form of cash, a check or an electronic transfer to your checking account. The funds may also be loaded onto a pre-paid debit card. 

The loan is usually meant to be paid back in one lump sum payment but rollovers or renewals or interest-only payments are not uncommon. The loan may also be repayable in installment over a period of time.

Learn before taking a loan may be as high as $30 per $100 borrowed, which translates into a very high annual percentage rate (APR). Taking several loans of this type every year, could have an adverse impact on your finances.

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