Disadvantages of Online Payday Loans
1.The biggest disadvantage of most if not all types payday loans whether online or at a store are high interest rates. The typical lender charges $25 for every $100 advanced to you. This is due to the fact that there is no credit check so you are presumed high-risk.
2.Most companies deposit the funds directly into your checking account. The funds become available the next day, which is not good enough is some situations such as electric or water disconnection. Also, an existing overdraft situation in your checking account could cause the funds to be “swallowed”.
3.Ideally, you should pay off the loan in full on the very next payday. But this is not always practical as some other needs may crop up. In that case you often have the option of just paying the interest and extend (rollover) the principle. You could find yourself in a vicious cycle after that.
4.You don’t have much say as to what you will get. The company decides what to advance you based on your income, checking account transactions and other variables. The amount you get may not be what you’re looking for.
5.There are many scam payday loan companies online with impressive-looking websites. Some of these scam companies will sneak obnoxious conditions in the agreement and you could find yourself owing several times what you borrowed.