Right now, so many are struggling to make ends meet with bills are piling up, struggling to pay for rent, utilities, food, and other essentials, and even exhausting their options for personal loans from their banks or credit unions. If it’s nearing the end of the month, it may be tempting to get a payday loan or a cash-advanced loan. Unfortunately, these loans are predatory and have terrible rates, making them almost impossible to pay off.
It may be tempting to take a payday loan if you’re close to payday, thinking you’ll be able to pay it off once you receive your paycheck. According to studies, though, most people will find it difficult to repay the loan with fees and interest. They roll over the loan for another few weeks and the fees quickly pile up. It’s not uncommon for people to pay thousands of dollars for a single loan of only $500. In fact, payday and car title loans cost Americans nearly $8 billion in fees every year.
If you feel you must take out a payday loan, make sure to read the terms and conditions carefully. Calculate how much you’ll have to repay when the loan is due, typically in 14 or 30 days. Given the high-interest rates, which are sometimes as high as 500% - 700%, this amount may not fit into your budget.
If you are pressed for cash, try borrowing from other sources. These could include
Family
Friends
Bank or credit union
Credit card
You can also contact your bill servicer and ask for an extension. Many companies will consider working with your situation, as they do not want to lose a customer either.
If you’re in the military, the law limits the interest rate on payday loans that you may take out. The military also offers help to manage your money and other financial assistance.
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