1) Immediate Cash Loan Options
2) Immediate Cash Loan Requirements
Understanding the first two sections will really help you understand the reason why these loans are so expensive. With average rates (APR) above 450%, these are the most expensive types of loans in the industry – and as such it is even more imperative that you, as the borrower, understand every cost associated with your loan.
I’m sure you have heard about how crazy the fast cash loan rates are. You hear numbers like 500% APR, and probably think – what exactly does that mean? Do I have to pay $7,500 if I take out a 2500 loan? To help clear this up, we have broken down the fees you would pay for both a 14 day cash loan and a one month cash loan:
*Note – these numbers are examples only, and are based on a 450% APR, which is around the average rate for payday loans. However, each lender will have different rates.
Hopefully it is pretty straightforward to understand this chart. For example, if you were to take out a 2000 loan for 14 days, you would pay $346.15 in interest and fees, meaning that you would have to pay the lending institution $2,346.15 back when the loan came due. In other words, if you need to take out a $2K loan and pay it back in two weeks, then it will cost you $346.15 to do so.
As you can see, these loans are not cheap, and as such are not to be used as long-term financing. To be as blunt as possible – do not take out payday loans over and over again. Remember, each time you take out or extend the cash advance loan you have to pay the full amount again—there is no discount for having multiple loans. But this will not stop most companies from making it easy for you to extend or get a new loan.
One Note About Extensions
If you do find yourself in a situation where you cannot pay off the loan on time, you need to be very careful. This is how people fall into the ‘debt cycle trap’, and many people who take out payday loans find themselves in this situation. What happens is that in order to not default on the loan, you pay the interest due now, then you ‘extend’ the loan another two weeks. Essentially, you are taking out a brand new loan.
For example, (going back again to the 2000 loan), if you wanted/needed to extend that loan then you would have to pay all the fees (in this case $346.15), and then you would have another two weeks to pay off the loan. In other words, you just paid $692.30 to borrow 2000 for 28 days. Obviously, if you continue to do this you will just get farther behind financially and find it very difficult to get out of this trap – so do all that you possibly can to avoid it. In our next section of ‘The Guide’ we will discuss how to avoid this trap, along with other immediate cash loans legislation issues and news items that you need to be aware of before taking out these loans.