Many ads are being run on television along with Internet ads about payday loan services and how they are great alternative to your short term financial problems. The truth is that they simply are not and can cause a person even more problems when it comes to being in debt and owing some amount of money to another creditor. Payday loans are not the best option for anyone who does have that much money left over after their paycheck or after receiving their monthly state benefit.
All payday loans work in the same manner. They all involve the consumer putting up a posted dated check to serve as collateral for the loan which is all going to be including any fees that many charged as well. In order for the consumer to be able to obtain the loan, they are going to have some documents that are going to be given to the payday loan lender such as proof of employment or state benefits, a valid ID, a post dated check from there checking account and any items that one is going to be needing.
What gets consumers when it comes to payday loans is the huge interest rates and fees that can be associated with these kinds of loans. The fees and interest rates can be anywhere from $50-300 dollars depending on the amount of money that was borrowed. Payday lenders make their money by charging these huge fees and rates on every loan they lend. They catch the consumer in a debt trap where they consumer has to keep coming back and taking out another loan every two weeks or monthly so they can make ends meet after the next paycheck.
There are many other great alternatives that one should consider before taking out a payday loan. You should look into doing shopping with a credit union or some kind of other small loan company as they are going to be charging less fees and interest with better repayment terms. You may consider contacting your creditors and asking for some kind of payment plan. Setting a budget that one can stick with and is realistic or looking into credit counseling services may also be another option that can help educate you about debt and hopefully aid in getting you debt free. Call or visit your bank and talk to them about a service called over draft protection for your checking account. I can help with any mistakes or occurrences in which you may become over drawn with your account.
Payday loans are not the best options for short term financial problems. Take the time and explore other options before getting caught up in a debt trap. Payday loans are a thing that needs to used with extreme caution or simply not used at all. Research and explore other alternatives before giving into the easiness of these kinds of loans. If you absolutely have to use this service try to limit the amount of money that you borrow so you are not stuck paying back those huge fees that can be involved with payday loans.
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