Tuesday, July 17, 2018

Are Payday Loans That Bad? Get the Real Truth

Are Payday Loans That Bad? Get the Real Truth


Certain people have a lot of negative things to say about payday loans, but before you believe what you hear, remember that those people have probably never needed to use one. The truth is that a payday loan is not as simple as being either right or wrong for every person and every situation. There are pros and cons to this type of loan, and whether or not the pros outweigh the cons depends on you and your needs.

Are Payday Loans Too Expensive?


One common criticism of payday loans is that they come with high interest costs. It’s true that if you only look at the interest rate on a payday loan it will seem shockingly high. What you have to consider, though, is the actual amount of interest paid on each loan. A payday loan is small and is repaid within a week or two, which means the interest amount is small and affordable for most people. Compare this to a bank loan that is several thousands of dollars and is repaid over months—you’ll pay way more in interest for that kind of loan.

Will a Payday Loan Keep Me in a Cycle of Debt?


This is another thing that critics of payday loans harp on constantly. The truth is that it will only get you stuck in debt if you let it and if you don’t use loans responsibly. Payday loan lenders only approve borrowers who can afford a loan amount and can repay with their income on the next payday. If you won’t be able to repay on time, it’s true that you can roll over the loan, but this isn’t recommended. If you do it once or twice while cutting back a little on spending to make sure you can repay the loan on the second or third try, you’ll hardly be in a terrible debt cycle.

Do Payday Loans Prey on Desperate People?


This depends on your viewpoint, but for people who make use of an occasional payday loan it is insulting. Yes, there may be sometimes when an emergency necessitates a payday loan, but most people use these loans for other reasons. These are loans for people who have been turned down by other lenders, who don’t need to borrow a huge bank loan, and for those who just need an occasional small loan. They are for people who work hard and don’t have time to wait hours at the bank. These loans are not for the desperate.

To know for sure if a payday loan is right for you, stop listening to the harsh critics who have never been in your shoes. Instead, learn everything you need to know about payday loans and then make the best choice for your life and your finances. Only you can say if a small loan is the right option for your given situation.