Payday loans are becoming increasingly popular amongst consumers who take advantage of this easy form of instant credit. A payday loan is an unsecured loan so the risk is all with the lender. However, to combat the risk the fee for a payday loan is rather high in comparison to everyday bank lending products.
Online payday loan applications are quickly processed. You can expect to get the loan funds paid into your account within in an hour in most cases. The fees are greater, because of the convenience and ease of which you can borrow.
Before we go into more detail, you will need to realise that there are many different payday loan lenders out there and they do vary in the way they run their business and the fees and charges that you can expect to pay to service your payday loan.
The payday loan lending market is really a service demand business. They offer you a service and if you need it then the demand is there for them to charge what they need too, to make a profit.
Everyone has a different financial situation and what may be an unreasonable fee for one person may be acceptable to another under the circumstances that they face.
Payday loans are short term loans and they are generally pretty easy to get. You can can take out a payday loan for amounts of between $100 and $1000 with many lenders offering same day deposits into your bank account.
In fact, some payday loan lenders will have the money in your account within the hour at no extra fee while others will charge you a fee for this service.
However, as I said earlier, terms and conditions, fees and charges do vary so you need to shop around to find the best payday loan lender for you.
But what happens if you can’t make your loan repayment when it falls due?
This is where you will need to read your terms and conditions. Some lenders will allow you to repay your loan a couple days late with and without a fee attached.
Other lenders will need you to contact them before your loan is due to avoid the direct debit that they draw being dishonoured by the bank. This charge is forwarded onto you the borrower. Most banks charge at least $25 for a direct debit dishonour.
Different lenders offer different products. Some will let you roll over your existing payday loan with you only having to meet the interest repayment for that week, fortnight or month and your loan is extended until your next payday.
This can be a very expensive practice.
Some payday loan lenders do show a responsibility to their customers. You may find that you cant roll over a loan. Your loan may only fall behind two months before it is stricken from the register and forwarded to a debt collection agency to recoup the funds through legal means.
It is important that you read the terms and conditions and fully understand what can and can’t happen with your payday loan should you not make your loan repayment.