Payday Loans and Debt
Posted on Wednesday, August 11th, 2010 at 12:39 pm in Financial Planning, Helpful Payday Loan Info
Payday loans and cash advances are criticized by consumer advocacy groups as trapping needy customers in cycles of debt that high annual percentage rates make difficult to break free from. The truth is that customers from all economic backgrounds borrow cash advances to address many different short-term financial difficulties. From incidental expenses to monthly bills, cash advances can cover a variety of fast cash needs.
Cash advances and payday loans are consumer credit tools and should be used responsibly just like a credit card or personal bank loan. To stay out of debt, think carefully about what you need your cash advance for and how much you can afford to borrow. Cash advance amounts are often approved based on your monthly income, so you shouldn’t apply to borrow more cash than you earn in a month. Several states have regulations that limit consumers to borrowing no more than a certain percentage of their paycheck, protecting cash advance customers from borrowing too much. It’s a good idea to limit your borrowing to a smaller portion of your monthly earnings to make sure you can afford your cash advance payment and your other monthly financial obligations.
Consumer advocates quote triple-digit interest rates on cash advances and payday loans. While the annual percentage rate on a cash advance can be higher than other types of consumer credit, keep in mind that these rates only apply to customers who roll over their payday loans for several months or who repay the full amount with multiple installments. Most customers repay their cash advances in full on payday with only a small service fee of $15 to $20.
To borrow responsibly and stay out of debt, only borrow what you can afford, taking into account your other monthly expenses. Also make sure to pay your cash advance lender in full when your payday loan is due to keep the financing low.
Related posts:
How it Works
Complete the short form.
We match you with a lender based on their requirements and direct you to their website.
The lender will then display loan rates, terms and conditions for your acceptance.
Cash is directly deposited to your bank account after approval.
