By David Pilley on August 9, 2011
.JPG.aspx?width=75&height=75) As you know, names are often deceptive. Anything that says it’s “free” is not the case because somebody made it or grew it or purchased it so it could seem “free” to you. There is something out there called a ten dollar payday loan. It seems harmless, but don’t get too comfortable with it.
The name “ten dollar payday loan” sounds like it is simply a loan for ten bucks, but that is not true. The “ten dollar” part actually deals with the interest you will pay back. This type of loan is just like any payday loan, where the principal amount offered may be a few hundred to a thousand dollars. What “ten dollar” means is that, for every one hundred dollars, you will be paying back ten extra dollars. So, if you receive $300, the total amount you’ll pay back on the due date is $330.
These types of payday loans do not entail credit checks, and the basic requirements are the same as any payday loan: being a US citizen who is at least 18 years of age, having a checking account, and making a minimum of $1,000 per month. There are numerous websites offering them, and after you fill out an application, you will get your payday loan in 24 to 48 hours. The only difference between a ten dollar payday loan and a typical payday loan is that a ten dollar payday loan’s interest may be half of a regular payday loan’s interest.
Because payday loans are not subject to usury laws in every state, however, there may be extra fees involved if you do not pay the loan back on time. The time period of a ten dollar payday loan is just like any other payday loan: pay back the amount of the loan, plus the interest, in two weeks. If you can’t make the entire payment, you will be penalized with more interest.
Let’s say you have purchased a $300 ten dollar payday loan. In two weeks, you will have to pay back $330. Two weeks go by, and you can only pay back $200, leaving a balance of $130. Interest will then be added to the $130, but at the rate of the original $330. This means if the balance on your ten dollar payday loan is $330, you will be penalized $33 in interest, bringing your balance to $363, due in two weeks. If your balance is $130, you will still be charged $33 in interest. A few missed payments, and the result will be paying more in interest than the original amount you got in your loan.
Having me tell you the possible outcome of a payday loan is much better than you getting a payday loan for yourself and dealing with the potential debt. The name “ten dollar payday loan” really means paying back ten dollars per every one hundred dollars of the loan. That doesn’t sound tempting at all, does it?
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