• Payday Loan
  • Is getting a Short-Term Loan smart?

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    Make sure you're able to repay

    Whether you should get credit through SMS or not highly depends on your financial situation. Even though the Swedish economy is improving, most people are struggling to pay their monthly bills. As a result, many are turning to SMS loans to get the money they require faster. But however, if you aren’t careful, this type of loan can worsen your financial situation or even trap you in cycles of higher interest borrowing. A very good Swedish comparison solution company, SMS Lån 123, has recently come to market. Find out more about them by visiting their Facebook and/or Twitter page

    To secure these small short-term loans, borrowers won’t require credit checks or collateral. Moreover, most of them will offer you the money within one or two days. To get one, you will have to write a check to your lender for the money you are borrowing plus the associated fees. The lender will provide you with the cash and hold the check until your next payday.

    When you receive your paycheck, you will have to pay the amount plus the fees. To qualify, some lenders will demand access to your electronic checking account so that they can deposit the money in it. The lender can also debit the actual amount you have borrowed plus the fees if you fail to repay the amount in full and on time.

    What will happen if you are unable to repay?
    pa If you fail to repay the principal plus the associated fees, the lender will roll over your loan. They will then charge you additional fees and calculate another interest. You will then have until your next paycheck to repay plus the accumulated fees. A major problem people face is that even though the costs seem to be low at first, they are very high (particularly if you consider annual interest rates the lender will charge you). And while these short-term solutions, some individuals get indebted for more than a year. 

    Are there smarter alternatives?
    Before applying for a payday loan, consider the other available options. Some common options include:
    –    Personal loans from local bank
    Banks and building societies lend money at lower interest rates. They are therefore a better option for those that can get them. 
    –    Family or friends
    Even though borrowing from friends and relatives may put some stress on your relationship with them particularly if you aren’t able to repay the money on time, the source is a better alternative. 
    –    Cash advance from a credit card provider
    Interests for cash advances are higher than those of secured personal loans. 

    When should you consider an SMS loan?
    –    If you aren’t earning enough money to help you qualify for a personal loan.
    –    If you do not meet repayment requirements of most borrowers; most lenders have algorithms that assist them to gauge your risk of not repaying. 
    –    If you have outstanding credit; most lenders have subscribed to companies which help them track how things are going within a short time. 
    –    If your checks have bounced recently
    –    If you haven’t secured a job and you have no other option

    Also, if you just opened a bank account recently, a payday loan may be a smart idea. But always consider the other options before going for one.

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  • Payday Loan
  • What to Do before Getting a Payday Loan

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    Payday-Loans-versus-Car-Title-Loans-382x300Many people use payday loans, and you might have heard the term, but let’s see what it is. A payday loan is a type of short-term loan that is for borrowing small sums of money. You can find them everywhere, from large enterprises to small online shops and it’s very easy to get one. However, when you have to pay it back, the sum of money will increase due to the increased interest rate.

    There are many things that you’ll have to pay attention to before taking any loan because the banks or the financial institutions have clauses that can be tricky.

    Let’s see what you need to do before taking a payday loan.


    Before Taking the Loan

    When you apply for your payday loan, make sure that the agent checks if you’re financially credible. It means that the lender needs to make sure that you can pay back the money that you owe each month.

    You should receive explanations about the most important features of your loan. For example, you need to know that you will be charged extra money if you don’t pay back in time or that this type of loan is not adequate for long-term borrowing.

    The representative of your chosen financial institution should also explain what CPA is and how it works. If you’ve already gone through this process, and you still don’t know what it is, here’s the explanation. CPA comes from continuous payment authority, and it means that you allow the lender to take the money that you owe them each month from your account (the debit card account).

    How to Pay It Back

    When you take the payday loan, they will say that you can pay it back in one month. At the end of this period, you will have to give back the sum of money that you have taken plus the interest.

    Many people choose to pay their payday loan through the debit card account, and they use the CPA – the continuous payment authority.

    If you don’t have enough money in your account at the due date, you will have additional charges for late payment.

    It’s not recommended to roll over the loan. The agents from the financial institution might tempt you with “rolling over” your credit for another month, and if this happens, expect to pay a larger amount of money when the due time comes. It happens like this because the interest rates will add and you will pay a lot more than you have agreed to in the beginning.

    payday-loans-online-same-dayIf you can’t pay it back when the time comes, you need to call the lender and let him know. They might freeze the interest rate, or they might help you in creating a payment plan that you can use. It’s important to take just as much money as you can pay back because otherwise, you can end up in a debt spiral.

    The Details

    If taking a payday loan is the only way to get the needed amount of money, you need to pay attention to the contract and the details that it contains. Reading everything is important, even the fine print that is part of the deal.

    Don’t forget that you will receive the money almost instantly, but you’ll have to give it back when the time comes. Be sure that you can pay it back and try to use other solutions for improving your financial situation and avoiding more financial problems.

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