Payday loans belong to the most advantageous types of loans. That is why
Americans always try to get a personal loan. Payday loans are cheap and can be received quickly.
The amount of payday loan is not that big. It is $392 on average.
It is not a big amount that can cover only basic expenses. After taking a small payday loan many households can forget to give this loan back.
The process of payday loan taking does not differ much from the process of taking a long-term loan. An applicant has to submit several documents. These papers are sent for evaluation by financial companies. They assess a client’s profile and issue a loan.
One of the most important stages of an application process is a Loan Agreement signature. It is a key document. It states the basic terms of personal loan provision. Here is the next information that can be found in this paper:
- Sum of loan. The payday loan amount can be different. It can range between 100 to 1000 dollars. Financial companies do not issue too big personal loans to households. They give the highest personal loan only to an applicant who provides solid application documents. A borrower has to show he has a very high income.
- Loan commission. Each financial company assigns its own commission on a loan. It is good to choose a loan provider that issues a moderate commission. A company that asks for low or no commission can cheat a person.
- Date of loan return. It is a key date that is mentioned in the Agreement. On this date, a person has to return a loan back. If he does not do it, he will get a fine. Fines can be very high. It will make a borrowing very expensive.
Payday loans money is transferred to a borrower’s account some hours after the Loan Agreement was signed.
From the same account, money will be taken back. In case a financial company cannot take a loan back, it will create troubles for the client.
Here are several scenarios of what can happen:
- A person will have to pay more. A borrower should be able to cover the body of the loan, commission, and fine. All together it makes a sum very considerable. Personal loans are taken by Americans with moderate income. They will hardly want to pay additional fines.
- A borrower can be taken to court. Many financial companies take a borrower directly to the court. There is nothing a loan taker can do about it. He will have finally to cover the loan, fines and pay a lawyer. Overall, it will become quite expensive.
- A borrower will be assigned a low credit score. It is another negative consequence of paying a loan back late. A credit score is assigned by a Financial Bureau. If a person does not pay any of his loans on time, his score goes down. If a person has a low score he will not be issued even one more personal loans.
These are negative consequences that can happen if a borrower does not return money on time.
Consequences of payday loan return delay can be very harmful.
It is better to stick to the personal loan agreement and return money on time.