We are reminded of this payday loan
option every where we go. There are advertisements on the sides of buses, on
T.V. and even sitting in your email inbox.
So, when you are going through a
tough time, and are tense about finding the money you need, this may seem like
the quickest way to get out of the financial problem. In that moment it
probably is the simplest solution. After all the advertisements say that you
can have the money in as little as an hour. But what happens after that? What
happens after you have paid whatever minor emergency you have?
Did you know that payday loans have
an interest rate of almost 500%. This means that for every $100 you borrow, you
have to pay about $15, and what happens if you should have to go over the term
of the loan? What if you can´t pay the loan back in the fifteen day allotted
time period? The payday company tells you not to worry, that they can extend
the period of the loan, and even extend it as much as 6 months. But do you know
that they charge you penalties for extending that loan and those penalties
could be as much as another $15 for every hundred dollars loaned.
Before taking the easy way out and
applying for that quick and easy payday loan you should look at other options.
The Nations consumer protection agency suggests that consumers look for other
loan alternatives before looking at payday loans, and if payday loans are the
chosen loan, then consumers should only borrow as much as they need and pay it
off immediately at the end of the loan term (in other words at the end of the
fifteen day period).
There are other loan alternatives to
the payday loan and these include, a credit union loan, a small loan company
loan, a bank loan, or even a community organization, or family loan. These are
all less expensive options to the payday loan and have the same loan term of
fifteen to thirty days, or in many cases an even longer term frame.
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