5 interesting facts about payday loans
Do you know payday loans are more famous than McDonald’s across the world? Here in this topic, we’ll walk you through some interesting facts about payday loans:
An average payday borrower can take out up to 8 loans per year
If you compare this number, it seems amazing, right? But the convenience of payday loans is what compels people to borrow them frequently. Also, since the interest rates are low, people can easily repay the money they have taken. You will be shocked to learn that approximately 12 million Americans rely on payday loans each year. It takes up to an average person borrowing eight times a year. Research shows that borrowers spend less than $500 on interest charges, which in no way affects their financial circle.
About 50% of payday loans are renewed or rolled over
Surprisingly, one in five payday loans are renewed within the first 14 days. Although it sounds amazing, it happens in most payday loans where borrowers end up paying way more than they were granted. Lenders provide money to borrowers who very often renew their loans. This can add to the total costs to a large extent and easily engage anyone in the cycle of debt. This is why critics often suggest that people avoid payday loans.
Borrowers end up paying much more than they expected
Although this practice is not common, many borrowers still complain about paying more than they initially expected. No matter what type of loan you take out, there will always be a chance to pay back more money than you ever imagined in your wildest dream. So if you borrow a typical loan of around $350, you could end up paying double that amount. Especially since the APR rate is very high, in some states it can reach around 400%.
You can apply for a payday loan with a bad credit history
Even if you have a bad credit history, you still qualify for a payday loan. Because they’re designed to help those in dire need of money, lenders won’t pester you to give lots of details. You will just need to provide them with proof of your income, ID card details and current address. Also, you can repeatedly ask payday loans no credit check if you frequently get into financial trouble.
The average payday loan is under $500
Unlike traditional loans, a typical payday loan is between $350 and $500 and can be issued in a single day. The median payday loan should be around $350. There are very few states that have increased this loan amount to $500. However, the real income of lenders comes from interest charges. This is the main reason why many lenders earn huge income in a short time. But before you sign up for a payday loan, be sure to read the terms and conditions.