Understanding Payday Loans

Payday loans have received a lot of bad press in recent years. With their short loan periods and high interest rates, there are plenty of reasonable criticisms of payday loans and payday lenders. However, as with any other financial product, a consumer who wisely uses a payday loan can benefit from the availability of a short-term loan. In order to properly use a payday loan, a person should understand how the loans work and the potential pitfalls of payday lending.

A payday lender offers consumers the ability to borrow small amounts of money for short periods of time. For example, a person who does not get his or her next paycheck for 10 days can borrow a few hundred dollars from the payday lender until the paycheck arrives. Typically, the borrower writes a check to the lender which is post-dated for the date the paycheck is due. The lender then gives the borrower cash in the amount of the check minus service fees. For example, a person may write a check for $200, pay $40 in fees and receive $160 in cash. When the borrower's payday arrives, the lender simply cashes the check to satisfy the loan.

If a borrower is unable to pay off the loan at the end of the borrowing period, lenders may allow him or her to renew the loan and extend the borrowing period. However, the lender will charge a new fee to renew the loan. As the borrower has to continue paying the fee over and over, the loan gets more expensive with each renewal and it becomes more and more difficult for the borrower to pay off the loan. If a borrower defaults on the payday loan, the lender will aggressively seek collection of the debt and reports of the delinquency may be made to credit reporting agencies which will harm the borrower's credit.

The biggest key to using payday loans is for the borrower to avoid taking loans for anything but necessities and only when the borrower is able to fully pay off the loan at the end of the borrowing period. Borrowing money at such high rates for spending on entertainment or the purchase of non-necessities is simply poor financial management. Failing to pay off the loan at the end of the borrowing period will result in renewed loans and higher and higher fees which can easily become a financial trap.

Short-term loans are emergency credit products of relatively small amounts designed for short-term financial issues only and can become an expensive product if used for long-term purposes.

The owner and operator of Nemocash.com is not a lender and is not involved into making credit decisions associated with lending or making loan offers. Instead, the website is designedonly for amatching service, which enables the users contact with the lenders and third parties. The website does not charge any fees for its service, nor does it oblige any user to initiate contact with any of the lenders or third parties or accept any loan product or service offered by the lenders. All the data concerning short-term loan products and the industry is presented on the website for information purposes only. Nemocash.com does not endorse any particular lender, nor does it represent or is responsible for the actions or inactions of the lenders. Nemocash.com does not collect, store or has access to the information regarding the fees and charges associated with the contacting lenders and/or any loan products. Short-term loans are not available in all the states. Not all the lenders in the network can provide the loans up to $1,000. Nemocash.com cannot guarantee that the user of the website will be approved by any lender or for any loan product, will be matched with a lender, or if matched, will receive a short-term loan offer on the terms requested in the online form. The lenders may need to perform credit check via one or more credit bureaus, including but not limited to major credit bureaus in order to determine credit reliability and the scopes of credit products to offer. The lenders in the network may need to perform additional verifications, including but not limited to social security number, driver license number, national ID or other identification documents. The terms and scopes of loan products vary from lender to lender and can depend on numerous factors, including but not limited to the state of residence and credit standing of the applicant, as well as the terms determined by each lender individually.

APR Representative
APR (Annual Percentage Rate) is the loan rate calculated for the annual term. Since Nemocash.com is not a lender and has no information regarding the terms and other details of short-term loan products offered by lenders individually, Nemocash.com cannot provide the exact APR charged for any loan product offered by the lenders. The APRs greatly vary from lender to lender, state to state and depend on numerous factors, including but not limited to the credit standing of an applicant. Additional charges associated with the loan offer, including but not limited to origination fees, late payment, non-payment charges and penalties, as well as non-financial actions, such as late payment reporting and debt collection actions, may be applied by the lenders. These financial and non-financial actions have nothing to do with Nemocash.com, and Nemocash.com has no information regaining whatsoever actions may be taken by the lenders. All the financial and non-financial charges and actions are to be disclosed in any particular loan agreement in a clear and transparent manner. The APR is calculated as the annual charge and is not a financial charge for a short-term product.

Late Payment Implications
It is highly recommended to contact the lender if late payment is expected or considered possible. In this case, late payment fees and charges may be implied. Federal and state regulations are determined for the cases of late payment and may vary from case to case. All the details concerning the procedures and costs associated with late payment are disclosed in loan agreement and should be reviewed prior to signing any related document.

Non-payment Implications
Financial and non-financial penalties may be implied in cases of non-payment or missed payment. Fees and other financial charges for late payment are to be disclosed in loan agreement. Additional actions related to non-payment, such as renewals,may be implied upon given consent. The terms of renewal are to be disclosed in each loan agreement individually. Additional charges and fees associated with renewal may be applied.

Debt collection practices and other related procedures may be performed. All the actions related to these practices are adjusted to Fair Debt Collection Practices Act regulations and other applicable federal and state laws in order to protect consumers from unfair lending and negative borrowing experience. The majority of lenders do not refer to outside collection agencies and attempt to collect the debt via in-house means.

Non-payment and late payment may have negative impact on the borrowers’ credit standing and downgrade their credit scores, as the lenders may report delinquency to credit bureaus, including but not limited to Equifax, Transunion, and Experian. In this case the results of non-payment and late payment may be recorded and remain in credit reports for the determined amount of time.