It is important to learn there are solutions we can turn to in situations like this and these solutions each have a different effect. We may try really hard to save our money but sometimes things happen that our outside our control.
When a rent payment is coming up you generally try to have enough money in the bank to pay it. This can be difficult though when other things arise that same week like if your car breaks down.
You have only enough to pay off the rent but you have to fix your car in order to get to work. You consider just not paying your rent on time.
If you could wait another week then you would get your next paycheck and easily pay off your rent. The problem with doing this is landlords charge a late fee on late rent.
This is usually a percentage of your rent which translates to a substantial amount. Because you do not want to pay this fee you look to other solutions.
Another thing you can choose to do is write out checks for both bills even though you know you do not have enough money in your account to cover the costs. In doing this you hope they will be late in taking the checks to the bank.
If they wait to deposit them, you might be able to get to the bank with your next paycheck in time and make sure there is enough money in your checking account. The thing to remember is you are giving your checks to businesses and businesspeople.
They are interested in getting that money and thus will most likely take your check in that night or the next morning. When they do one of the checks will bounce.
When checks bounce banks and other financial institutions charge your account a fee which usually ranges from $25 to $50. Payday lenders recognized these situations can be costly and thus decided to offer short term loans that cost less than the alternatives.
With this in mind they created payday loans. This is one of the most rapidly growing industries because many people are starting to discover the benefits of these loans.
On a $100 payday loan you will be charged just over a dollar a day in fees. This means if your loan lasts two weeks you will only owe $115 back.
The shorter the duration of the loan, the less you pay. Because of this you should treat the loan like a cash advance of your next paycheck. Borrow it until you receive your paycheck and then be prepared to pay it back.
Although payday loans have these low fees, they have a high annual percentage rate, or APR. This just means they would have a high fee if they were to last a year.
Because they do not last a year, this translates to a normal fee. When taking out a payday loan you should remember to act responsibly.
As with any other kind of loan, you do not want to take it out because you want to buy something. You should weigh out your options and decide if the expense is necessary.
If it is not you should wait for you next paycheck. If the expense is for a need as opposed to a want then only borrow what you know you will be able to pay off.
When you do this you can save money from taking out a payday loan. Taking out a payday loan is very simple.
All you have to do is walk into any payday lender with a state or federally issued ID card, a checking account with your name on it, and proof of income, like a paystub. Upon showing these to the lender, you will discuss with him how much you want to borrow and for how long.
He will then explain to you how much you will owe in fees when the loan ends. When this has been established you will write out a check for how much you will owe when the loan ends and date it for that day.