Pay day loans benefit the middle class Americans who live from one pay check to another. Person with a job, checking amount and right id proofs can borrow anywhere from $100 to $500 from the pay day loan lenders until their next payday. Sometimes even if the pay is fine, people can have emergencies such as a blown transmission, an unexpected doctor’s bill or a badly needed roof repair.
In such situations, Payday loans through sources like Personal Money Network comes into picture to solve these emergencies where a normal bank loan won’t be of much help. Banks keep away from such small amount transactions too.
The Pay day loan borrowers have to write a post-dated check or can even provide written authorization to the payday lender for the amount of the loan plus a fee. The fee is typically 15%. Either the loan is repaid in person by the borrower on the next payday, or the lender cashes the check or initiates an electronic funds transfer.
This payday transaction takes not more than 15 minutes and is therefore great for the middle class Americans in need of money during an emergency where the traditional loan transaction is not possible or not quick enough.
Critics are saying that the interest on these loans are high. But the interest is high if expressed as an annual rate. It doesn’t affect here because the typical term of Pay day loans is a couple of weeks. Also it is necessary to note that the annualized interest rate on the average payday loan is much lower when compared to the amount a traditional bank loan borrower will have to pay if their cheque bounces or if the payment on the mortgage or credit card is late.