The Good, The Bad and The Ugly about Payday Loans
They can sure help you out when you are in a tight spot financially, but there are several serious factors that need to be considered before you actually take out such a loan.
Payday loans have become extremely popular and in fact, it would seem that everywhere you turn there is an offer for a payday loan to get you the extra money you need until the next payday.
Millions of people are looking to Payday loans to help solve temporary financial crises.
What Is A Payday Loan?
A Payday Loan is an “unsecured” loan given to a borrower for a short-term.
Payday loans are also called “cash advance loans”, “postdated check loans”, or “deferred-deposit check loans”.
No matter what you call it, it comes down to one thing: getting instant cash advanced.
Payday loans range in size from $100 to $1,000, depending on state legal maximums.
A Payday Loan is a small loan you can use when you are temporarily out of money.
How Do You Get a Payday Loan?
You have two choices – get it online or get it in person.
Payday Loans are made by Payday Loan stores, check cashers, and pawn shops. Some rent-to-own companies make Payday Loans. Loans are also marketed via toll-free telephone numbers and over the Internet.
You can qualify for them easily. All they require from you is to be 18 years of age with a U.S. citizenship, steady employment and in most cases, a valid checking account for the electronic transfer of the amount.
What is Good About Payday Loans?
A Payday Loan can be obtained for any purpose – and at any time.
A Payday Loan is the fastest and most easily available loan in today’s time.
These loans make available to you up to about $1,000, and it will be deposited into your checking account within 24 hours; in some cases, it could be as soon as 30 minutes.
All you need to get this type of loan is proof of employment or last month’s pay slip, apart from giving your bank account information.
Payday Loan companies offer financing to consumers who wouldn’t be able to get emergency cash anywhere else.
They provide immediate financial relief without a great deal of struggle.
What is Bad About Payday Loans?
The main pitfall with Payday Loans is that they don’t help you solve the problem at hand. If you’re having financial difficulties, payday loans can only make the problem worse.
The high rates of Payday Loans make it difficult for many borrowers to repay the loan because they are already in a desperate financial state.
They keep extending the loan and you end up paying more in fees that you originally borrowed, putting you in a worse financial shape that when you started.
What is Ugly about Payday Loans?
Payday Loan Companies charge you exorbitantly if you fail to repay them.
You can be charged $50 to $60 a day for nonrepayment. (NSF)
The interest rates on Payday Loans range from 300% to over 1,000%.
Because of this you will actually end up owing more in interest than what you borrowed in the first place!
Payday Loans may appear to be a quick and easy way to get money for rent, bills, credit cards, etc.
Most Everyone intends to pay off the loan immediately. But that rarely happens.
If you don’t have enough money to pay the bills, it is not likely that you will have extra money to pay off the loan in full.
The first loan is simply the start of a cycle where you are continually further and further behind on your payments and in need of even more money.
Before you know what has happened, you are left in a downward spiral of overwhelming debt.
Disclaimer: Individual financial situations and obligations vary considerably. This information should only be considered a general guide and is not intended to replace professional legal or financial advice.
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