5 interesting facts about payday loans
Do you know, payday loans are more famous than McDonald’s across the world? Here, in this feature, we will guide you through a few interesting facts about payday loans:
An Average Payday Borrower Might Take up to 8 Loans a Year
If you compare this figure, it sounds astonishing, right? But the convenience of payday loans is what compels people to borrow them frequently. Furthermore, because interest rates are low, people can easily pay back the money they’ve taken. You will be shocked to know, around 12 million Americans rely on payday loans every year. This takes up to an average person borrowing eight times a year. The research shows, borrowers spend less than $500 on the interest charges, which doesn’t affect their financial circle at all.
Around 50% of Payday Loans Are Renewed or Rolled Over
Surprisingly, one out of every five payday loans is renewed within the first 14 days. Although this sounds astonishing, it happens in most of the payday loans where borrowers end up paying way more than what they were given. Lenders provide money to borrowers who renew their loans very often. This can add up to the total charges to a great extent and easily engage anyone in the cycle of debt. This is why critics often suggest people keep away from payday loans.
Borrowers End Up Paying A lot More than What They Expect
Although this practice isn’t mainstream yet still a lot of borrowers complain about paying more than what they had expected In the beginning. No matter what kind of loan you borrow, there will always be a chance of paying back more money than you would have never expected in your wildest dream. So if you’re borrowing a typical loan of around $350, you could be paying double this amount by the end. Especially as the APR rate is very high, in some states, it can be as high as around 400%.
You Can Apply for a Payday Loan With a Poor Credit History
Even if you have a poor credit history, you are still eligible for a payday loan. Because they are designed to help those in urgent need of money, lenders will not hound you to give a lot of details. All you will need to give them is proof of your income, details of the identity card, and current address. Furthermore, you can repeatedly apply for payday loans no credit check if you frequently engage in financial issues.
The Average Payday Loan is Less Than $500
Unlike traditional loans, a typical payday loan is between $350 to $500 and can be issued in a single day. The median payday loan is expected to be around $350. There are very few states that have raised this loan amount to $500. However, the actual revenue of the lenders comes from the interest charges. This is the main reason how a lot of lenders earn staggering amounts of income in a short time. But before you register for a payday loan, don’t forget to read the terms and conditions.