No one wants to live from paycheck to paycheck, but it happens when we don’t plan ahead. Without well-stocked financial reserves, many of us are caught with nowhere to turn when unforeseen expenses crop up. Most people in this situation turn to credit cards or payday loans as a way of getting through the rough spots, but using high-interest credit also has its drawbacks. The interest you’ll pay on high-interest unsecured debt is extremely high. If you didn’t think you could make it before – without this extra cost – how will you make it over the next financial hurdle?
The answer, of course, is to plan ahead and live on a budget. These are not sexy, glamorous, or new strategies for getting ahead in life. You won’t see ads for budget planning on late-night TV infomercials. No hot celebrities will be touting the benefits of planning for the future. It’s not a get-rich-quick scheme. In fact, most people think budgeting is pretty boring.
If you use your imagination, though, you might think about how much safer you will feel with money in the bank, or how much you will be able to save on interest when you don’t have to turn to high-interest lenders for help in the lean …
With so much press about high risk payday loans being a form of subprime lending, or articles saying that payday lenders are targeting the poor and elderly, you might get the wrong idea about payday loan consumers. They’re not necessarily old, poor, or uneducated. Many are hard-working middle-class Americans who simply struggle sometimes living paycheck to paycheck.
After the credit crunch zapped most borrowers in the midst of the worst recession we’ve seen in almost a century, the reality is that people make use of credit when and where they can find it. Using credit has become standard in our society as a way of getting ahead. Overusing credit, however, has also become standard for too many of us, who break out the plastic to buy things we simply can’t afford, hoping that we’ll be able to keep up by making minimum payments.
As PersonalMoneyStore.com recently shared on its website, the average payday loan customer might surprise you. Their average customer was stable, having lived at the same address for three years and worked at the same company for six, they were in their mid- to late-thirties, and many of them were homeowners.
So where does all this concern over consumer protection come from? The main problem with $1.500 payday loans is the …
“Yeah, right,” you’re thinking. Who’d want to get into debt fast? Well, thousands of people go to payday lenders every month and do exactly that. They have an emergency need for cash, and don’t know where to turn. All those television ads and radio commercials made it sound easy – and it is – easy to get into debt, that is.
Payday loans are small, short-term personal loans usually secured by a post-dated check or ACH withdrawal from a personal checking account. All that’s needed in most cases is a copy of your most recent paystub, and you can get payday loans fast either in person or online.
Although they are often marketed as a cash advance, payday loans are not as simple as that. If you got a cash advance directly from your employer, for example (something that almost never happens anymore, unless you are lucky enough to work for a friend or family member) he or she would simply pay you a little bit early. There would be nothing to pay back, because it’s money you’ve already earned, or will earn.
With a payday loan, you’ll have to pay back the original loan amount, plus interest. “That sounds reasonable enough,” you’re thinking. While it’s true that paying back the principal plus …
Payday loans are short term loans offered without a credit check. Pretty much anyone with a job and a checking account can obtain a payday loan. In some cases, the job may even be optional.
The procedure is simple. Go to a payday loan store (there are many franchises to choose from), fill out an application and in minutes, you have cash in hand. Then, when you get your paycheck, you come in, pay back your loan, with interest, and are done with it.
The danger of habit
It sounds easy. And in some ways, it is. The problem is, if we’re not very careful, taking out payday loans to cover daily needs can become a chronic habit. The fact that the loans are so easy to take out is, in the long run, a big part of the problem.
When taking out a payday loan, most people catch the fact that the interest rates are high right off the bat. The advertised rates vary from place to place, often based on how much money you borrow, but they average between 10% and 15% in most cases. And unfortunately, the advertised rates are a bit deceiving.
Interest rates are key
When you take out a bank loan, you are given …