Payday loans in the US are fairly simple and require no more than an ID card, your bank account information, and proof that you have some sort of income. In less than 24 hours you can get the amount of money that you’ve asked for.
Certain lenders have different processes and different prices. However, what happens if you are not satisfied with the amount of money you can borrow in your state? What if you wish to get money from a different state?
All US states have different processes in which you can borrow money and not only. The sum of money that you can borrow is different as well – and it does not matter if they are payday loans, installment loans or mortgages.
With the things above being said, let’s take a look at some terms that you should understand before you get a payday loan in another state.
APR stands for “annual percentage rate,” and it consists of a percentage that, hypothetically, you will need to pay in one year. For example, if you borrow $700 and the APR is 300%, in one year you will need to pay $2100 back. It’s just a simple calculation. The APR is the way that the lender makes money off borrowers.
The APR is different from one state to another, but generally speaking, the APR works on the basis “the smaller the amount of money borrowed, the smaller the APR is.”
Most states work on an APR of 450%, but the percentage can vary. If you are thinking of borrowing money from a lender form another state, be sure to check the APR first.
One thing that you should worry about is the term. This refers to the amount of time in which you should return the money back to the lender. The term can be from 10 to 30 days, depending on the lender and the state in which the lender resides.
The trick here is to choose a lender with a very big term in which you can return the money. Some borrowers have difficulties when trying to return money back in such a short amount of time.
If you really experience troubles with returning the money, you are allowed to do a rollover. The rollover consists in extending the time period in which you can return the money, although this involves some additional fees as well. There is a limited time of rollovers in each state.
Also, be aware that some states don’t have a rollover. In this case, you will need to return the money in the exact amount of time you have established with your lender.
If you fail to pay the money even after a rollover and the term has expired, you can find yourself in a difficult spot. Calls upon calls from the lender asking you for the money can occur – and in a worst-case scenario, a debt collector could show up at your front door with police included.
To conclude the above information, getting a payday loan is tricky. However, if you have the nerves and courage, you can borrow money from a lender which resides in another state.
Image credits to: Taber Andrew Bain on Flickr