The Truth About Payday Loans

The Truth About Payday Loans

The Truth About PayDay Loans
Over the​ last couple of​ years we’ve all been bombarded with numerous emails,​ banners,​ and event TV and radio commercials offering to​ save our immediate cash shortage by offering so called payday loans.
Obviously,​ the​ offers indeed sounds very interesting,​ if​ you​ have a​ phone and a​ checking account,​ the​ money will be transferred to​ your account by next business day.

However,​ the​ ads always fail to​ mention the​ astronomical cost that you’ll endure by taking out such a​ loan .​
Due to​ legal issues,​ the​ interest rate on​ such loans is​ usually similar to​ credit card rates .​
It is​ obvious thought,​ that these lending companies will not make sufficient profits by lending the​ money for 2 weeks at​ annual rate of​ 10% .​
Therefore,​ in​ addition to​ the​ regular interest rate,​ these companies charge so-called service fees .​
These range of​ the​ fee depends on​ the​ company you​ deal with,​ however,​ they often end up being much higher than your interest payment.
Furthermore,​ if​ you​ take a​ payday loan with the​ term of​ 2 weeks,​ until your next paycheck that is,​ the​ chance is​ that you​ won’t have enough money to​ make the​ payment and still have enough to​ live on​ .​
After all,​ if​ you​ had the​ money,​ you​ wouldn’t need the​ loan in​ the​ first place .​
in​ this case,​ the​ lending companies are more than happy to​ reissue the​ loan to​ you​ or​ extend its due date by another two weeks .​
Obviously,​ in​ order for them to​ cover their time of​ processing your loan again,​ they will once again charge you​ with the​ astronomical processing fee .​
After a​ while you​ realize that it’s been a​ few months and you​ still haven’t been able to​ repay the​ loan,​ yet your account is​ being charged every two weeks .​
After doing some simple calculations by combining the​ charges,​ you​ see that you’ve already paid more than you’ve borrowed,​ yet you​ still owe the​ principal.
After reading this,​ one will rightfully have a​ question of​ how to​ get immediate funds without being getting into endless debt by predatory lenders .​
There is​ no one single right answer .​
However,​ there are some options available,​ which might come into use .​
If you​ already have payments due or​ bills to​ pay,​ try calling your current creditors and see if​ you​ can postpone the​ payment,​ or​ even temporarily freeze the​ payment schedule .​
If you’ve always been paying your bills on​ time,​ the​ chance is​ that your creditor might give you​ a​ one time break .​
If the​ situation is​ that you​ need money right away,​ and you​ can’t take it​ out of​ your budget,​ you​ can always considering borrowing from you​ family and friends.

In order to​ avoid such situations when you​ have to​ turn to​ lenders or​ others for help,​ it’s better to​ always have at​ least some savings,​ in​ case a​ financial need should arise .​
Credit cards are also a​ good way to​ solve temporary financial constrains,​ especially considering that there are no fees or​ interest to​ pay if​ the​ bill is​ repaid within 30 or​ so days.

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