Low Interest Payday Loans for Fast Cash

by Anita Vasquez

Payday loan companies have been in business for many years and have helped scores of people with what are dubbed as ‘low interest payday loans’ These short-term loans can be used when unexpected expenses occur, between paydays. A typical payday loan company will require a personal check to be written to them or a debit to be authorized for the amount borrowed plus a flat fee. The check will be deposited on the agreed upon date, which is usually 7-14 days later. However, financial experts agree that payday loans should be avoided at all cost. They also say that low interest payday loans do not exist; it is an oxymoron. Unless, of course, you borrow from a friend or family member!

Payday loan companies have been under a great deal of scrutiny due to their high interest rates and marketing tactics. Recent advertisements have shown customers that appear to be happily receiving low interest payday loans for a weekend getaway or vacation rather than emergency situations. However, when the flat fees are shown as an annual percentage rate (APR), the low interest payday loans are actually loans with APR’s that can reach 1300% or more. Ironically, the shorter the length of the loan, the higher the APR. Payday loan companies have long been accused of targeting the working poor. This is a group of hard-working individuals, that live paycheck to paycheck. When something unexpected occurs, they often go to a payday loan company for a temporary reprieve.

While the payday loan companies stress that the loans are short-term, they offer an extension to a customer who is unable to pay the loan in full on the due date. To extend the loan, the customer need only pay the interest. The principal is held over until the next payday when the principal plus the interest will again be due. For example, a $300 loan received may have a flat fee of $75. The total amount of $375 would be payable in 7-14 days. If the $375 cannot be repaid, a payment of the $75 flat fee will extend the loan for another 7-14 days at which time $375 will again be due. Thus, begins the cycle that can become an extremely expensive series of transactions with companies that market low interest payday loans.


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