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Debt Counseling Assistance :: Payday and Loan
Payday and Loan:
How a Payday Loan Can Hurt You and Your Bottom Line
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Cash advance, payday and loan companies can really prey on customers. You hear the ads saying “Need cash fast? If you need a payday advance, just come in and we can help.” But, you don't hear all the fine print about interest rates and exorbitant fees.
It's a reality that many Americans are often faced with the unfortunate situation of being stuck for cash or just needing something to tide them over until the next paycheck, which payday and loan companies know that. When a financial emergency comes up or a bit of money is needed to pay a bill, those payday loans can often seem like the easy answer.
Payday Loans are Predatory
But what many borrowers fail to realize is that payday loans are simply another form of predatory lending that can cost borrowers much more than what they borrow. By law, lenders have to disclose the cost of a loan in writing, but borrowers are often willing to take those risks.
Communities Against Payday Predators (CAPP) said the trap comes when a borrower can't pay off a loan and then pays more money to extend the time to pay back the loan. With all the additional service fees, many people wind up paying the equivalent of 300 or 400% interest on their loans.
Payday Loan Alternatives
But, you can protect yourself from payday and loan companies by trying several borrowing alternatives. These alternatives include:
- Applying for a line of credit or small loan from a local credit union or small loan and trust company.
- Shop around for the credit with the lowest rates and lowest costs.
- If you're having trouble making payments on other bills, contact the creditors as soon as possible and let them know. You'll usually be able to work out a repayment schedule or plan.
- Get overdraft protection on your bank's checking account. This can help cover small emergencies as long as it's not abused.
- If you have a debt problem or need help budgeting, contact a consumer credit counseling service.
- Create a budget for yourself and stick to it.
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Debt-Counseling-Assistance.com :: Payday and Loan