Even though the cost of payday loan is higher than the regular loans that you take from banks, the benefits of a ten dollar payday loan far outweigh the cost. Generally speaking payday loans cost around $15 to $30 per week for every $100 borrowed. Since there is huge competition amongst payday loan lenders, you can find a payday loan with low interest charges. But for that you have to look around.
Unsecured Loan
There is a reason why the price of payday loan is higher than the price of usual loans. A 10 dollar payday loan is an unsecured loan. So the risk for a lender is quite high. On top of this your credit is not checked by the lender. Again this increases the risk for the lender. Obviously you cannot expect a lender to give you money without him/her making an effort to minimize his/her risks. The high cost of payday loan covers up the risk for lenders.
Low Cost Payday Loans
However, you do not have to be dismayed by the talks about high cost of payday loan. Today you can opt to become a ten dollar payday loan borrower. These payday loan lenders offer first timers a low cost payday loan. You want to know how low? These payday loans would cost you $10 for every $100 borrowed. This rate is for a week. So if you borrow $100 for two weeks, you would pay $20 as charge.
Great In Emergencies
Even with the high cost of payday loan, these loans are worth it. These payday loans are best suited for financial emergencies. Payday loans are called for when you are facing a severe cash crunch and you have to deal with your immediate emergency. Your immediate emergency can be in the form of a doctor's bill, car repair, utility bill payment, etc.
A payday loan will help you deal with your emergency by putting the much needed cash in your hands. On your next payday you can pay back the loan. If you look carefully, you will realize that a payday loan actually saves you money. The late fees on your credit card bills would turn out to be much higher than a payday loan fee. If you were unable to have your car repaired, you would have to miss work. Missing work for a day or two would definitely cost you more than a payday loan.
So in the end you can conclude, just like I did, that it makes sense to go for a payday loan when you face an emergency. Obviously you have to keep in mind that you must repay the loan on time. Plus you have to maintain financial discipline. This way the cost of payday loan would be insignificant in comparison to all the trouble that it would save you.
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