Though loan business is mostly known
by many already, we cannot avoid the fact that there are some who are
unfamiliar of it. When we ought to apply for a payday loan for the first time
and we happened to be unfamiliar with accounting or commerce related subjects,
we may be discouraged and confused with what payday loans are.
Everything should come in detail and
it should all be understood before anything goes wrong amidst the application
process of the loan.
There might be some misconception
with the loan terms that will cause misunderstanding between the lender and the
borrower. Like for example, we talk about lowest APR. What APR is? Is this the
lowest amount we, the borrowers can receive when we avail the loan?
Well, actually APR stands for Annual
Percentage Rate and not the amount we can borrow. Thus with this simple
clarification and validation of the information regarding the loan, things will
not go wrong.
The example made mention above is a
hyperbole. However, most of the us I believe would agree that knowing and
understanding what many are talking about is very vital. It will really give us
a better grasp of the situation we are in to.
True to say that, " A little
know how of something is of dangerous thing." Let us be keen observer and
we should practice being interactive in a way that we ask and clarify what we
do not know.
Now, let us talk about payday loans
and the many things we must know about it. We begin with APR. As mentioned
above, this is an acronym which stands for Annual Percentage Rate which
indicates how much finance fee we will pay the company every year. Another term
for APR is the interest rate. For instance, we borrow an amount, we will pay it
whole, the amount we borrowed plus the interest rate of 8 percent for example.
Whenever we apply for any kind of
loan, we are often asked to give a collateral, but with payday loans, no
collateral is required.
Well, collateral is an asset with
value which we give to the lending company in case we cannot pay the loan. In
line with this collateral matter, the company will have the legal claim on the
property we have surrendered until the loan is paid, and this is owned by the
company by default.
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