How Payday Loans works – biggest dangers & 14 better alternatives

By | April 25, 2019

Process to get approved for a payday loan!

According to a Bankrate survey, about 25% of Americans live salary to salary. The money they earn barely covers their daily expenses, with little or nothing left for emergencies. If you are in this situation, unforeseen expenses – such as a $ 300 repair for cars – can cause a financial crisis.

Payday loans – also known as “cash advance loans” – seem to offer a way out. You can walk into one of the thousands of payday offices across the country and walk half an hour later with $ 300 to pay for that repair law. Then you can come back on your next payday to pay back that $ 300 – plus another $ 45 or so in interest.

The problem is that if you were struggling to earn $ 300, losing $ 345 from a salary would mean a big hole in the budget. And so before the month is over, you may find that you are coming back for a new loan to cover the bills that you can no longer pay. It wasn’t long before you ended up in a continuous cycle of debt, from loan to loan, while the interest payments became higher and higher. A 2012 report from the Pew Charitable Trusts found that the payday’s average borrower concludes eight $ 375 loans per year, with a total interest of $ 520.

Many borrowers cannot break free from this cycle without taking extreme measures. They reduce their budget, borrow from friends and family, pledge their assets or take out another type of loan. These are all steps they could have taken to prevent them from receiving the flash credit, saving them all that interest.

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So if you want to avoid the payday loan, make sure that you have looked at all their other options first. Even if you absolutely need some extra money to get through the month, there is almost always a better way to get it than going to a payday loan shark.

Read about:

payday loans biggest dangers 14 better alternatives

Who uses Payday Loans and why

Dangers of Payday Loans

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Payday Lending laws

Alternatives for Payday Loans

Dealing with debts

Sell or pledge your assets

Collect your paycheck early

Automatic title loans

Payday Loans and Paying your bills late

Build an emergency fund

Borrow from friends and family

Go to your bank

Use Online Lenders

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