Payday
loans may be helpful when you are having temporary money problems or are
facing a financial emergency and need money on a short-term basis. You
should attempt to pay your lend in full when it matures. If you are unable
to do that, you should make every effort to pay at least part of the
amount financed before you renew the transaction.
The truth about interest!
It's important to pay particular attention to the
rate of interest on no faxing payday loans. The rate on cash advance
payday loans may be 500% per year or more. Borrowing $200 for 2 weeks at
500% will cost you $38.36. Compare this to borrowing $200 for 2 weeks at
36% ($2.76) or 12% ($.92).
If this loan is refinanced four times, the cost
difference increases dramatically! In fact, it will cost you nearly $200
to borrow $200 for ten weeks:
YOU SHOULD AVOID TAKING OUT more than one no faxing
payday loans!
If you already have Payday loans outstanding, you
should avoid taking out another such lend. When you have more than one
cash advance payday loans outstanding, you may find it very difficult to
pay the required finance charge payments, much less paying all or a
portion of the amount financed when the lend comes due. If you need a
larger, longer-term loan, you should seek other, more traditional, lending
sources.
HOW THEY WORK
Payday loans work like this:
You fill out an application and provide the lender
with items such as paycheck stubs and a photo ID.
You sign a lend agreement, write a postdated check
to the lender, and receive your money.
Your check is held until your loan payment is due -
usually two weeks. The lender then deposits your check - unless you have
replaced the check or have already repaid the lend.
The lend agreement that you are required to sign is
a legal document that obligates you to repay the loan. It also sets forth
a lot of important information. Be sure to take note of the following
items:
The Amount Financed: The amount of credit provided
to you or on your behalf. (This is typically the amount of cash you will
receive.)
The Finance Charge: The dollar amount the credit
will cost you, or the amount of interest you pay for receiving the credit.
Annual Percentage Rate (APR): The cost of your
credit as a yearly rate. Because these loans are small, short-term
transactions, the APR is typically quite high. In Wisconsin, there are no
laws that limit the interest rate that a lender can charge.
Total of Payments: The amount you will have paid
after you have made all payments as scheduled. (This is the amount that
you will write your postdated check out for.)
YOUR RESPONSIBILITIES
The lend agreement you sign legally obligates you to
repay the loan. Make sure to read the contract before signing it and
retain your copy for your records.
If you have not renewed the lend or paid it in full,
make sure you have sufficient funds in your checking account on the due
date of the lend so your check clears when the lender deposits it.
If you cannot or do not repay the loan, the lender
can seek a money judgment against you for the face amount of the check and
court costs; and, if they were disclosed in the contract, any late
charges, interest after maturity, and NSF fees. Once a money judgment is
obtained, a lender may attempt to garnish your wages.
Many lenders also list past due loans with the
credit bureau. This may affect your ability to get credit in the future.
Other things to consider
If you pay the loan in full prior to its due date
you are entitled to a partial refund of the finance charge.
If you are married and your better half does not
sign the loan agreement, the lender is required to give your spouse a
written notice that you obtained the lend.
IF YOU HAVE QUESTIONS
The Department of Financial Institutions (DFI) is a
state agency that licenses and regulates companies that make consumer
lends in Wisconsin where the interest rate is over 18% per annum. This
includes the cash advances firms. Wisconsin residents may contact DFI
Licensed Financial Services at 608-261-9555.
DFI also licenses and regulates adjustment service
companies, commonly referred to as debt counselors or consumer credit
counselors. These organizations help debtors set up and keep on a budget.
A list of the adjustment service organizations licensed by DFI. Wisconsin
residents may also contact DFI Licensed Financial Services at 608-261-9555
for the name of the adjustment service company nearest you.
