You see them everywhere. The joke used to be a church on every corner. Instead, perhaps a sign of the times, we now seem to have a cash loan place on every corner. Interestingly, many states have enacted regulations prohibiting payday loan places from operating in their states. Let's be real here. If you have financial problems, going to a payday loan place is not an option for you. These establishments were never meant to solve long-term financial problems. If, however, you just need a little cash to tide you over until your next payday, then these places are a definite option, hence the term payday loan. This article will give the reader some basic facts about short term funding, as opposed to title loans, and what to expect from a cash advance loan.
The biggest reason people have issue with these short term loan establishments is the interest rate these places charge. It is a valid concern. Most payday loan interest rates are 456 percent for a 2 week period. That amount sounds staggering. The amount is usually the equivalent of $17.50 per $100 financed. So, if you borrowed $500, as many people do, it would cost you $87.50. If you repaid the loan in two weeks, however, which is supposed to be the point of a payday loan, this amount, though high, is not impossible, especially for people who have little to no other options. If, however, you take out payday loans, knowing that in two weeks you will have just as little money as you do now and have little hope of repaying them back, you will run into trouble. For this reason, other options are a good idea, such as contacted a credit counseling institution like Money Management International, as payday loans will not help you.
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