HOW PAYDAY LOAN INTEREST RATE RESPONSIBLE FOR FINANCIAL CRISIS?

HOW PAYDAY LOAN INTEREST RATE RESPONSIBLE FOR FINANCIAL CRISIS?

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Payday loans have gained a bad reputation as more and more people are getting aware of this predatory lending.  It is one of the highest risk loans with 391% Payday Loans Rates and can reach up to 600%. It is well researched that eighty percent of payday loans are not paid back in just two weeks. This way the interest rate keeps on increasing making it impossible to clear the debt. You might be thinking a payday loan is an easy way to pay your emergency bills or even to repay previous debts but the reality is different.  This easy-looking solution will put you in more debt and might cost you more than the problem you are trying to get out of.  Your bounced check will keep on getting you more and more in trouble.

You can look at yourself; the interest rate of a payday loan is 391%-600% and now compares with other alternatives like debt management which is 8%-10%, credit cards 15%-30%, online lending 10%35%, and personal loans 14%-35%. Now answer this question: should payday loans be borrowed or not?

Some states have realized the dangers of payday loans and have even banned them. Now governments are also looking at the figures of interest rates companies are applying. Soon maybe we will get relief but till then it is not ideal to take payday help.

How do payday loans work?

It is very easy to understand payday loans and this is why people must get aware of them.  It is a quick solution and people take it in hurry. They panic when an emergency financial situation occurs and they run for payday loans. A first-time user might not have any idea about the debt crisis they are putting themselves into.  It is a budget-busting way and can harm your expenses as well.  There are online payday loan lenders. You have to visit their website and apply for the loan by giving them your documents and bank account details. 

The loan amount can be from fifty dollars to thousand dollars.  Lenders will approve your loan and the amount is transferred to your bank account on the same day. In two weeks when you get your next paycheck the amount is deducted from the account. If you borrowed a hundred dollars the Payday Loans Rates are going to be twenty dollars.

What if you cannot pay back your loan?

The majority of the lenders are going to give you two deadlines to pay back your loan.  Borrowers can also ask for rollover. This service is only available in some states. If a rollover is available then you can pay the fee and your loan gets extended. The trouble starts as the interest rate is going to increase.  For instance, if you have taken an average loan of $370. Using the lowest payday loans fee available is $15-$100 borrowed, the borrower owns charges$56 for the total amount of loan which is $431. In case the borrower is going for a rollover then there is going to be a new amount applied which is going to be $495. This makes $431including an interest rate of $65 which becomes $495. This is how your payday loan keeps on increasing.

Alternatives to payday loans

As you know how the interest rate of a payday loan can put you in a situation you don’t want to be in. Many pieces of evidence show how borrowers fall into the trap. There are many other ways to get financial help. You just need to be calm and patient. Here are some alternatives you can go for

Borrow from your contacts

When you are in trouble first you can rely on your family and friends. This way there are also chances that you will get instant help. Your good relationships are going to lend you help and get you out. You can ask for these generous gestures that will not include any risk or high-interest rate. Just make sure that you return their money on time. For the money, you cannot lose good relationships. Keep in mind they helped you when you needed it the most.

Paycheck advance

If you are lucky enough to work with a company that understands their employee needs they are going to give you a paycheck advance. You can also go for extra shifts to pay back. Many friendly companies serve their employees extra.  Do not feel shy and ask for help where you work. It might seem a little daunting for some but it works.

Debt settlements

If your loans, hospital bills, and credit cards keep you in need of money then you must go for debt settlements. It can be bad for your credit report and you might have to pay more price on your credit score. to discuss more Payday Loans Rates you can also get help from Real PDL Help.

 

 

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