The Myths of Instant Payday Loans
If you tell a friend or family member that you are considering taking out instant payday loans, you will probably find that they will try to talk you out of it with all the myths that they have heard. However, there are some that are complete myth and instant payday loans may be something that is perfect for you to survive for a one-off until payday.
Instant payday loans carry a high interest rate. While this is true, this interest rate is only applicable if you do not pay back the loan on time. There are usually rates set for the first 31 days, which will make overdraft fees look extortionate. This short term lending is what these instant payday loans have been created for so the interest rates are kept reasonable.
Instant payday loans will harm your credit rating. This depends on how quickly you pay back the loan. You will find that paying it on time will actually help your credit rating because you will be able to prove that you can borrow money and pay it back when you are supposed to. However, if you keep the money for longer, without arranging it with the company, you will do more damage to your credit rating.
Instant payday loans are time consuming. Many people believe that, like long term loans, it will take days of signing paperwork to see the money. However, this is completely wrong. Everything is done electronically, which means that you could see the money go into your account within an hour. This does all depend on when you apply and whether you bank account agrees to the fast cash payment; not all of them do yet.
You will pay more to pay back instant payday loans early. Banks usually charge you to pay back your loans earlier than the agreed time but payday loans to not do this to you. In fact, there are many providers that will cut some of the cost of the loan for the early repayment as a reward; there are some that are able to charge a daily percentage rate rather than a set fee for the whole month. If you think you will be able to pay back early, these companies are well worth considering.
You can only take out a small amount of money with instant payday loans. This is true but this is simply because of the short term aspect of the loan. You need to remember that you are to pay this back when you are next paid, which will mean that you can only borrow an amount that you can afford. Lenders will do checks to find out your income and from there, they will determine the maximum that will be available to you.
There is a minimum amount that you must take. This all depends on the instant payday loans company that you look at borrowing from. There are some that will set a minimum of $50 or $100. However, there are other companies that will let you borrow as little as $1 if you really need it.