A Vicious Cycle -The Payday Loan
The payday loan trap & how to get out of it. If you’ve ever woken up in the sudden realization that you are flat broke, no money to pay rent, buy food, cover the expense of a broken down car or medical emergency then you are not alone. I have been there too, and so have many American’s. It’s so appealing to the struggling member of society to go into an establishment and qualify for a quick and easy payday advance. You fill out some forms, they give you cash that day and then on your next check it is your responsibility to pay them back. Simple enough, right? The grim reality is that if you are taking out a cash advance, chances are you aren’t going to be able to pay that money back even when you do get paid again. It’s more than likely that with combined with interest, the loan just means putting off those expenses you were unable to budget for initially and can cause you to simply take out another cash advance. This vicious cycle is called a payday loan trap, and the following article is meant to provide information and advice on how to relieve yourself from this scheme.
The payday loan trap & how to get out of it
The payday loan trap & how to get out of it.Versus a loan from a trusted lender, such as your bank, cash-advance establishments profit off of the susceptible middle class who need the cash right then, or whose credit simply is not good enough to provide for any other type of loan. The interest rates are through the roof with these companies, and once you’re in that payday loan trap, it’s incredibly hard to get out. These companies stand by their inflated interest rates and claim that it comes as a cause of advertising.
It’s a true fact that if banks were to provide loans to their existing client base, the loan would have a much smaller interest rate, and be able to be paid back over a longer amount of time. The banks have a much easier time accessing these funds and if it weren’t for credit, instead of throwing away $520 in fees to borrow $375, consumers would be able to spend less than $100 on the same loan! Banks are also the go-to for loan counseling, particularly payday loan debt and payday loan help. They are professionals after all!
When payday loan debt happens, it happens fast. Not only is it detrimental to your credit, it can be near impossible to rectify if you didn’t have the funds, to begin with. If you’re lucky, you’ll be a member of a credit union which will provide more options for loans. However, they still could do so much more. Proposals have been made for these financial institutions to offer financial education so that a loan is not the only option. Including but not limited to, affordable payments, interest rates that decline based on the size of the loan and payments that don’t break the bank and put you into the negative balance. Hopefully, these institutions will find the ability to achieve these goals and offer the payday loan help so many are in dire need of. So many people are drawn in by the ease and convenience of a payday advance will then be able to simply go to their trusted financial institution, become educated and rest assured that their funds are in good hands.
Posted By: National Payday Loan Relief