The payday loan industry has become a thorn in the side of many people who get trapped in a vicious cesspool of high-interest payday loans. It all sounds convenient having access to quick money, but the dark and real side of this is that it weakens people financially. The people who often times take these financial “bombs” as I like to call them out for personal use are not living above and beyond their means. Most people dont make enough money and their bills exceed their paychecks. So many turn to a payday loan to get short term help only to find themselves digging a deeper hole financially. For one the interest rate is three times higher than traditional lenders. Most people could see $200 or more in just interest alone aside from the amount that was taken out. So for example by the time you pay off a loan for $225 in installments over a course of four to six months you’re paying over $500 just in interest on an amount that could be paid off within a couple months.
This triggers many to seek out other payday loans to solve their financial crunch. Its not a good idea to use this as a means to solve your financial problems. It only hurts you in the long run and many states should ban them due to the unscrupulous buisness practices. Many eventually seek out bankruptcy to stop these places from taking money from their accounts-unfortunately that’s the deal with payday loan places you must have an active and working bank account in good standing. Then you have to meet income requirements in order to take out a loan and signing mountains of paperwork mostly agreements and a contract explaining the terms of repayment.
Its right then and there does this cause more problems than it does good. For many the payday loan stores that infiltrate the community mainly in African-American and Hispanic communities has seen a rise in useage. Many are trapped with taking out so many loans they can’t get themselves out of the bind they often find themselves in. The fact that so many people are having to file for bankruptcy just to get the collection calls, letters, and threats of wage garnishments to stop just presents an even bigger problem and that is getting people to better manage their money so they don’t have to take out these short term loans to fix a long term issue.
It’s really presenting itself in those who are actively working, but many can’t obtain loans from a bank because they’re railroaded with credit issues that often get them declined for loans or requires them to get a co-signer and in this day and age many people won’t be able to get one since not everyone is willing to co-sign for someone if they’ve been burned by family or friends before and don’t want their credit to be smeared with someone else’s debt. In light of this taking out a payday loan is not a good idea and if you do make sure you can afford to repay it because in the end these things will destroy you financially and with so many bankruptcies being filed that’s a clear sign that pay day loans are just another means to destroy you financially.