With less than a week before she was to receive her next paycheck, Roni was faced with a problem that millions of Americans experience at some point in their lives: bills that are due and not enough cash available to pay them. Faced with a dilemma of late fees and a lower credit rating, many consumers with no options left turn to credit card advances as a stop-gap resolution for their problems. Unfortunately, for many Americans, they either do not have a sufficient line of credit available to tap in emergencies situations like Roni's or their credit is maxed out. So, what do they do? Like so many consumers are learning they can turn to providers of short term loans like those found on the internet. Let's take a look at some of these options to see if they are right for you! Loan options vary amongst providers, but they typically permit borrowers to apply for a loan on one business day and receive funds deposited to their checking account the following business day upon approval of their application. Most lenders require that you have a checking account that has been open for a minimum of 90 days, that the borrower be at least 18 years of age, and that the borrower be employed or receiving a regular monthly check [pension, social security, etc.] Loans are short term with many being in the neighborhood of 7-14 days. As in the case of Roni, she could request a 7 day loan and pay her principle back with interest once her paycheck was deposited in her account. If for some reason she was unable to repay on time, she could request an extension which would result in higher interest charges. The reputable providers explicitly warn consumers to be disciplined by paying their loans back on time. In addition, quite a few will not let you take another loan out until several days after your previous loan was paid off; they recognize that it isn't in the consumer's best financial interest to be overly dependent on this particular loan system. Loan rates vary and some lenders will give you a lower rate if you pay your loan back early. Rates of $10-18 per $100. borrowed are the norm for the shortest term loans, but can rise significantly for longer terms. Consumers are advised to weigh their options carefully before making any loan commitment. So, what did Roni do? She applied to a short term lender and borrowed $500. for 7 days. She was charged $15 per $100. borrowed which meant that she paid her lender back $575. once her loan was due. Roni calculated that she avoided steep late fee penalties and a lowered credit rating by securing a short term loan. Her creditors were satisfied and her credit rating was left in good standing. |
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