If you are in need of a payday loan, you may want to consider a payday loan line of credit. The amount you can borrow is determined by state laws, and is typically between $100 and $4,000 depending on your state. These limits are established by the lender based on your ability to repay the loan and your eligibility.
Getting a payday loan line of credit
Payday loans are short-term loans, and the due date is usually the next payday. If you have other income, such as a check from a bank or credit union, you can pay off the loan before it is due. In most cases, you’ll write a post-dated check for the balance of the loan. Alternatively, you can authorize the lender to debit your bank or credit union account electronically.
If you’re in need of a loan but don’t have a bank account, you can turn to local nonprofits or churches for help. Depending on your location, these nonprofit organizations may be able to provide you with a small loan for free or at a very low interest rate. You can find these agencies through the internet or through other sources.
Fees
Fees for payday loan line of credit add up quickly when the borrower cannot repay the loan on time. Most payday lenders offer the option of extending the loan, but doing so adds to the original fees. If you borrowed $300 and were unable to pay it off by the end of the month, you would pay an additional $45 in late fees. The total fee would be $74. You may not need to extend the loan more than twice.
Another important thing to keep in mind is that payday loans are designed to provide fast cash. That means you will have to pay them back on time, and most of the time, this means writing a postdated check or authorizing the lender to electronically debit your checking account. Payday loans are most commonly used by people with poor credit and little or no savings.
Interest rate
The interest rate of a payday loan line of credit can be quite high. The amount you borrow may be small, but the amount you pay will add up over time. For example, if you borrowed $100 and paid it off in two weeks, you would owe $725 in interest, or about 329 percent of the original loan amount. And if you borrowed the same amount again in a year, you would pay back 330 times as much.
A payday loan line of credit is available to those who need cash fast. Payday lenders often charge a high interest rate, but many people assume that these lenders deal with relatively low-risk customers. In fact, many states have enacted laws to regulate payday loan interest rates, but many lenders have pulled out of the states that have adopted these laws. Fortunately, the federal Office of Comptroller of the Currency, which oversees national banks, has taken action. The goal is to ease the burden on banks and make it easier for them to lend to people with less than perfect credit.
Maximum amount you can borrow
A payday loan line of credit will usually have a maximum amount you can borrow. Most states will cap the loan amount at $500 or less. This can help you to avoid paying more than you can afford. In addition, a smaller loan size will often come with a lower interest rate and lower costs.
The maximum loan amount you can borrow will vary depending on your income and the type of payday lender you’re working with. Depending on your income, most states have a cap on the amount you can borrow, and you may not even qualify for the maximum amount. However, some lenders may not limit the amount you can borrow, and will only consider your income and other financial obligations in deciding how much you can borrow.
