One of the easiest traps to get caught in if you're struggling financially is borrowing money at a high interest rate. And if you have bad credit or no credit, you're an easy target for payday loan lenders.
Need the money now? No problem. Just pay an exorbitant amount of interest to borrow off your future paycheck, and you're back in the game. And it is a game you can't win.
Payday loans feed off the desperation of people who are struggling. Don't get caught in the trap. Read one mom's story of her downward spiral into payday loan hell here.
Sunday, January 20, 2008
The Payday Loan Trap
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18 comments:
Yes...it's definitely a no win situation. It can be compared with someone getting a quick fix as opposed to making the hard decisions such as cutting expenses.
Sometimes it may be really necessary to borrow some money, though now you can easily become a slave of your creditor.
Thanks you the post.
Hanna
We fell for a similar trap with credit cards.. the best thing we ever did was get a personal loan and pay the damn things off!
Ya, that's very true. Many people fell into this because they needed the money instantly. And the only solution they can take up is loan. Quite sad... that many of us are money slaves... i agree with Cuban cigars Dave regarding the credit cards issue too..
They are trying to shut down these services or put a limit on the interest these companies charge. This would shut these down because they would only be able to make a dollar or two instead of 300% interest. My view on this is, god gave us free will. We can make choices, if people are willing to pay 300% let them. This services is valuable to them.. I would never use it because I am smarter than that.
Definitely, its not a good idea. I dont support this.
This is a consumer protection issue and most of the people who need these loans are usually lower-income people, least able to pay these really high percentage rates. To me it really is taking advantage of people when they're having problems and people get a little desperate and often times it makes a bad situation much worse.
You would think there would need to be some kind of cap.
They payday loan can be usefull as a last resirt. Most people just get to used to useing them and wind up paying so much money for them. If you need cash and have no other way they can save you but only use them when you need cash not just to buy something you do not need.
Payday loans are not designed to be traps. Most lenders are very, very cautious and careful about who they will lend to. Try filling out an online application, you'll see what I mean. They ask all sorts of stuff. That's because they only make money lending if you pay it back, plus the fees. Do you think payday lenders don't want to be paid back? Hardly. they don't want to trap anyone, they want their money back. The only trap is in people thinking they can borrow more than they really can. If you think you can borrow $300, you should probably only borrow $200, just to be safe.
I'm here trying to make this ... Maybe???
Payday loans are a great tool to utilize. They are quick and easy and help you get cash fast.
Ya,I do agree with your thoughts which are quite true.Its really a game which we cannot win.
Though payday loans are a good source of quick help but I also admit that they can make us the slaves.
a no win situation over here. damned if you do, damned if you dont.
the thing I love about Payday loans is that they are meant to be short term and can help in a difficult situation if you are running a little short on cash during the month
Well, I guess that's why it's offered only on short-term basis. It does require high interest rate compared to others.
It's really important to make sure that you carefully examine your finances before making any kind of decision on payday loans. They aren't a long-term fix.
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