Debt Help Choices You May Want to Avoid
Cash Advance / Payday Loan Information
The promise of fast, instant cash is the ultimate lure for the average cash strapped consumer. Television and radio ads make it all sound so easy, but the risks are big, too big to ignore. A payday loan is an advance on a borrowers next pay check. These loans are lower amounts, short-term with very high interest rates. They are extremely accessible and generally marketed toward lower income individuals. The borrower just writes a post dated check in the amount they wish to borrow, add in the lenders fee and walk out with cash in hand. The lender agrees not to cash the check until payday.
It all sounds simple and harmless enough, but the finance charges are where they get you. The annual interest rates for payday loans can be as high as 300 or 400%. And, if you extend, those amounts can double. People who utilize payday loans are often desperate for cash and often cannot afford to pay back the loan. In many cases people end up extending the loan through another pay period, which begins a dangerous cycle as that extension causes the interest to shoot up even higher.
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