Payday Loans A Bad Type Of Loan

Payday Loans – a​ Bad Type Of Loan?
The number of​ people using payday loans has greatly increased in​ the​ last year .​
Despite this,​ the​ payday loan industry has come under attack from a​ variety of​ different organizations .​
They have been criticized for charging high interest rates and putting people who are often already low income further into debt .​
In this article I​ will discuss payday loans,​ and why it​ is​ best to​ avoid them unless you​ absolutely have to​ use them.
No Credit History?
Many people who use payday loans are unable to​ get cash advances from traditional banks .​
This is​ often due to​ their credit history .​
Banks will typically reject people who either have no credit or​ bad credit .​
This has left open a​ large market for payday loan companies to​ make money from .​
Many services are now offered online,​ making it​ easier than ever for people to​ borrow money .​
The irony of​ this is​ that many banks are now giving credit to​ payday loan companies in​ order to​ tap into the​ market.
Paying More For Your Credit From Your Bank
This allows the​ banks to​ make money off the​ payday loan industry without having to​ directly provide loans to​ the​ customers it​ normally rejects .​
This fact alone should make anyone who uses payday loans angry .​
With the​ rise of​ the​ internet many people don't even have to​ fax information to​ be approved anymore .​
It is​ not necessary to​ show a​ credit history when applying for a​ payday loan,​ and this is​ why the​ industry has become so large .​
Many people argue that payday loans are good for people that need cash for emergencies.
You Must Save,​ Save and Save Some More
My answer to​ that is​ people should save money for emergencies .​
If you​ save money consistently,​ you​ should rarely have to​ use a​ payday loan .​
These loans are easy to​ get but come with a​ lot of​ strings .​
Many people become dependent on​ them,​ and begin using them between each paycheck .​
This puts them in​ a​ state of​ being dependent on​ a​ loan company that doesn't have their best interests in​ mind .​
The large interest rates they charge guarantee they will get more money back than they loan out to​ you.
Payday Loans = Plague?
My advice for payday loans is​ to​ avoid them unless you​ have a​ large emergency and no money is​ available .​
If you​ save a​ large amount of​ your income every month,​ you​ should never have to​ use a​ payday loan .​
These loans can put you​ into a​ cycle of​ debt which is​ hard to​ break free from .​
As soon as​ you​ pay back one loan,​ you​ will probably have to​ borrow another one .​
Some companies even ask for collateral,​ such as​ your car .​
If you​ default on​ your payments,​ your car could be taken from you​ .​
This is​ something you​ should want to​ avoid at​ all costs.
The Payday Loan Market Continues to​ Grow
The payday loan industry will continue to​ grow larger,​ especially due to​ the​ popularity of​ the​ internet .​
Many of​ these companies are only allowing new customers to​ borrow $500 until they can demonstrate a​ good payment history .​
While some would say that this is​ a​ good thing,​ I​ think that this will entice more people to​ jump on​ board and begin borrowing money .​
It is​ important to​ understand that the​ payday loan companies win,​ not you​ .​
You are not going to​ get ahead financially by using their services.
Planning For Your Future
If you​ are looking to​ become wealthy,​ you​ can do so by avoiding debt and saving money .​
You can invest for your retirement or​ purchase things that will appreciate in​ value .​
You should want to​ earn interest on​ your money instead of​ paying interest on​ money you​ borrowed from someone else .​
This is​ what separates wealthy people from the​ poor .​
They earn interest while the​ poor pay it.

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