Are you considering taking payday loans to help you in the emergency situation? Or you just have interest about it and wish to know more? Well, read on!

 

What is payday loan?

Payday loan is short term loan that you can use when you are out of money. It is usually for short term, like weeks but it will be a great help when you really need money. Before you take it, you must aware that there are costs and risks of this loan. The final decision will be yours.

 

The costs

First, you have to know that payday loan is expensive. You have to pay the higher APR (Annual Percentage Rate) percentage rate. For example, when you borrow $200 for two weeks, you need to pay extra $50 for the cost. The Consumer Federation of America said its rate is above 100% compare to other loan alternatives.

The risks

There are many situations when payday loan is great savior for your problem. But if you are not capable of handling your money and your debt, this loan will be nightmare. You have to aware that you have to pay back the loan in its due date. When you can`t, it will accumulate and getting more and more expensive until force you to take other loan to pay it. And so the circle of bad loan begins. If you are not aware of your ability to pay the loan, you better think twice before go for one.

The good

 

Aside of its costs and risks, there are also good things about this loan. You will get immediate cash to pay your urgent need. The companies / providers or lenders will always available for you at any time. You can even find them online which will make everything easier and quicker.

Now you know brief explanation about this loan. Now, will you take it or not? It is up to your own judgment.