Fast Payday Loans

Hands Exchanging Money


“Fast payday loans,” which are also called “cash advances,” “check advances,” and “post-dated check loans,” are an increasingly popular way to get fast cash. All someone needs in order to obtain a payday loan is proof of employment, a utility bill, a checking account, and a driver’s license. In today’s digital world, you can even receive fast payday loans online.

Consumers may be misled into thinking that fast cash loans are a cheap and convenient way of borrowing money for the short term. However, borrowers often find repayment difficult, as they’re inevitably left with little or no money for living expenses. Loan recipients often end up paying another round of fees, with no additional cash in return. Although there are many fast cash loans online, these also present the same issues.

There are so many ways to get smart with your money. You can use interactive tools and information to plan, save and even get out of debt.

Let’s take a look at why fast cash payday loans are not a smart option for your financial future.

The Issue with Fast Payday Loan Cycles

The individual seeking a fast payday loan writes a personal check payable to the lender for the amount he or she wishes to borrow, plus a fee. This expense is typically in the range of 10% to 25% of the amount borrowed, with the check normally held for up to four weeks. It is then “cashed” to repay the loan.

If the borrower cannot cover the check, they have the option of rolling the loan over for an additional four-week term by writing another check. This transaction comes with another set of fees, which are then added to the balance.

When new fees are tacked on (along with extremely high-interest rates) borrowers often become trapped in a seemingly never-ending cycle of increased debt.

Why a Bargain is Not a Bargain

Fast payday loans look enticing, but are loaded with crippling charges. With average annual interest rates ranging from 390% to 871%, fast cash means fast costs.

Consider this example:
If your check is written with a face value of $200, a 15% fee ($30) is applied. The amount paid to the borrower is $170 and the lender receives $30, which translates to an APR of 458% if the loan is repaid in two weeks. If it is rolled into a new payday loan, an additional fee of $30 is charged, the loan is raised to $230, and the APR jumps to 917%. In other words, it could cost $60 to borrow $170 for only one month.

Trusted Alternatives

Instead of using fast cash loans with excessive interest attached, consider other Flexible Loan Options with a local credit union that cares about your financial well-being.

Carolinas Telco Federal Credit Union members can apply for our  Personal Loan, which offers an alternative to payday lenders. Our Lend A Hand Loan can be used for just about any emergency financing need, even if you have less than perfect credit.

No matter which option you choose, remember that short-term relief could lead to long-term financial damage. Apply for a loan that meets your needs and keeps you financially solvent, or contact us today for more information.

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