All across the country are people find themselves experiencing severe financial problems. Their bills exceed the income available to them and they need to find some way to make ends meet. Sometimes these people discover the concept of the payday loan. The pro will be that getting the loan is relatively fast and easy so it will seem like a terrific solution. However, if people do not thoroughly investigate all the rules, regulations and nuances of a payday loan, the end result of getting this loan can be quite negative. There are a number of cons to getting a payday loan that must be considered prior to going that route to procure needed cash.
PAYDAY LOANS ARE ATTACHED TO LARGE FEES
Everyone knows that a loan will have some fees, including interest. However, if one decides to get a payday loan, there can be an interest rate of as much as 24 to 39% which adds up to mega money to be paid back in interest. If one doesn't have money when applying for a payday loan, think carefully about whether there will be money when the loan is due which will be on the next payday. There will also be those nebulous "administrative" charges added to the pay back amount. If there is no money to pay back the loan on the due date and one extends the loan, charges will be added again thereby increasing the debt. There are numerous people who end up trying to get another loan to pay off the first payday loan which creates a vicious cycle that is likely to end badly.
OTHER ISSUES FOR CONSIDERATION
Most people are honest and incur debts in good faith with the plan to pay all debt obligations when due. If one has reached the point of financial distress and is thinking about a payday loan, one must think about all the other money needed to pay routine monthly bills including rent, mortgage, utilities, food, car and gas. The amount required to pay the monthly bills just might not leave enough to meet that payday loan that is due. There are those people who cycle in efforts to find money to meet increasing debt. Becoming involved in this type of money juggling can often lead one into bankruptcy which is a most negative outcome.
While all this is going on, family is affected, stress and emotionally based problems can increase. One will most likely be constantly worrying and spinning wheels about how to solve the circle of financial problems. Remember that stress can lead to medical and psychological problems. Inability to continue employment on a regular basis also happens to some people in this situation. The stress is increased when one starts to get the threatening letters and phone calls from bill collectors. This is one of life's most horrible experiences. If one really looks into the concept of the payday loan process, it is possible to avoid all the cons involved.
THERE ARE OTHER ALTERNATIVES
When one is having financial difficulties, there are some suggestions for assistance. There are some credit cards available that have either no interest or very low interest for introductory periods of varying lengths. One can work on paying down the card when other bills are under control.
Local Credit Unions also recommend that one speak to their representatives regarding available solutions. Credit unions offer both unsecured and secured loans and will be able to work to help one find the most reasonable solution. When investigating local credit unions, one will learn that there will be lower interest and lower regular payments compared to other types of lenders. It is in one's best interest to explore avenues other than the payday loan for financial assistance.