Why Using a Payday Loan is Not a Wise Decision at All

June 21, 2017 at 11:33 AM Leave a comment

Payday loans have garnered wide recognition for helping borrowers get money fast. Life throws lots of lemons our way and you simply never know when a terrible phase of life will leave you looking for money. Unfortunately, payday loans can lead to a never-ending cycle of debt.

These loans may temporarily solve your problem, but without caution they may introduce new and larger financial hurdles for you. Be cautious before applying for a payday loan. Look for other sources of money before signing on the dotted line and consider payday loans alternative to meet your instant cash demands.

Here Are Some of the Top Reasons to Avoid Payday Loans

  • Too Expensive

Payday loans often carry high payback costs. The lending companies typically offer money easily, but charge a hefty interest rate. Interest rates can reach as high as 400%. When an emergency financial situation arises you don’t have much time to think about sources of income and money, but tread carefully so you don’t spend a ridiculous amount of time and effort trying to pay the loan back.

  • Creates Dependency

Payday loan cycles are just like any other bad habit that can get a hold of you. You start with the intention of using a payday loan “for the first and last time” but you suddenly find yourself depending on the money and unable to break free from the cycle of it. When the money comes so easily you may be tempted to sign up for payday loans more frequently. Payday loans can lure you into risky behavior as you begin to think of them as your back up plan to financial messes. Instead, opt for payday loans alternative to get money in an uncomplicated and stress free way.

  • Too Easy/ No Time to Review Agreement

Most payday loans provide money quite quickly, but to get the money so fast you may compromise on reading over the paperwork and signing agreements you don’t fully understand. Many times representatives ask you to sign papers even when you may be unsure or unready to sign them. If you are hesitant do not proceed. There may be a lot of hidden charges that you are unaware of. Payday loan representatives know you need money quickly. They also know that those in dire need will quickly sign paperwork without reading it.

  • Less Time for Repayment

Payday loans typically require fast repayment. In fact, this may be the biggest disadvantage of all. Will you be able to pay back the loan within a month’s time? If not, you may want to look for alternatives. If you don’t have money right now are you certain that you will have money within such a short period of time? The vicious cycle of payday loans occurs when the total becomes due but you cannot pay it. Keep yourself out of this loop by searching for payday loan alternatives instead.

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