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Cheap Long Term Payday Loan : An Illusory Notion

Nov 7, 2007
If you go out in the market or browse online to find a cheap long term payday loan, you will definitely end up disappointed. For a long term payday loan is simply impracticable as would become clear from further facts expounded herein. In order to fully comprehend why cheap long term payday loan is not viable, its essential to understand the concept of payday loan or cheap loan till payday first.

A short-term loan comprises small amounts. These amounts range from $100 to $1000 or so. As the figures themselves indicate these loans are meant for small but very often crucial needs of people. These needs could be payment of school or college fee of your kids or bills, which if delayed, entail fines as well as cause damage to your credit score. Such needs often present themselves 10-20 days before your next payday. By this time, mostly a large part of the money received against your last pay is exhausted. So you need assistance till you receive your next pay. The whole concept of payday loan is woven around these needs between your two paydays.

These are unsecured loan i.e. no collateral is required for obtaining this kind of loan. Now this means high risk for the lender. Due to high risk, the annual interest rate for these loans is high. However, over the years, rate of interest on these kind of finance has reduced significantly. Most of the online payday loans do not require any documents to be faxed. Thats why this type of payday loan is popularly known as no faxing cheap payday loan.

As already expounded above, short-term loan is meant to be taken and repaid between your two successive paydays. Thus, the usual duration of payday loans is 7-15 days. Also payday loans being unsecured loans entail a relatively high rate of interest. Payment of interest at such interest rates over a short period is both logical and rational. However, such high rates would translate into ridiculous amounts to be paid as interest over longer periods of time. So to put it plainly, cheap long term payday loan is simply not logical.

People benefit from cash advance only when they are availed over short periods of time. Even flipping or rolling over of cash loans is not advisable. By extending the natural or prescribed duration of these finances, they may be called cheap loans, but they cease to be cheap anymore.
About the Author
Cheap longterm payday loan is a term that goes against the very concept of cheap online payday loan. Payday loans are essentially meant to be lent / used for short periods. Visit cheap payday loan for more information.
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