Should You Avoid That Payday Loan

| July 5, 2011 | 0 Comments

Among the many types of loans available to the average American, many would say that the payday loan is by far the most tempting. Unfortunately, many studies reveal how many American families find themselves trapped in a vicious debt cycle after acquiring one payday loan after another in order to pay off previous debts.

Next to your credit card, the payday loan is probably the next most accessible loan to acquire for emergency expenses such as an unexpected illness or death in the family. Many payday-lending institutions do not require much from those who seek to avail of these types of loans, except for proof of employment and a pay slip indicating a capability to pay off the loan. Unlike other loans wherein you may be required to present other sources of income aside from an acceptable credit standing that will give lenders assurance of your ability to pay off your loan, the payday loan requirements are generally minimal.

The disadvantage to the average payday loan? Interest rates are generally higher than the usual.

This is why many are cautioned against compulsive borrowing from these payday lenders. Thus it is important that before acquiring a payday loan, you have to be financially ready for its consequences. This means that you are able to look forward and prepare for the payments that you will have to make on your next payday. This means you may have to sacrifice on your other expenses, avoid luxurious dinners and maybe deny yourself the pleasure of shopping or going to the movie house for a while until you have paid off your debts in order to avoid getting trapped.

Category: Payday Loan

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