You've probably seen them, whether on your morning commute or through an online ad – the ads offering you a fast cash advance in the form of a payday loan. They hype themselves up as bad credit loans that can help you get a quick influx of money when you really need it, often using nothing but a couple of recent pay stubs as the only requirement. But while getting a few hundred dollars may seem tantalizing, the truth is that whether you apply online or visit a brick and mortar location, payday loans are bad news for pretty much anyone who takes one out.
Payday loans are looked at with such a negative light by most financial experts that the government is actually in the process of cracking down on them.
- There are plenty of reasons, but the chief ones lie in their predatory nature and the huge interest rates associated with them.
- Their advertising likes to gloss over their negative aspects by claiming that they're bad credit loans are easy to get after bankruptcy, but the truth is that there are plenty of better ways to rebuild your credit than to do business with these lenders.
Consider that the normal payday loan is a two or three week loan up to around three hundred dollars.
- Now consider that when you calculate the overall interest you'll pay you end up actually being charged between three hundred and ninety, to eight hundred and ninety one percent interest – far more than even the worst bad credit loans.
- Current laws place criminal usury rates at sixty percent, but a few exploitable loopholes let payday loan companies circumvent these restrictions
- They also charge huge fees, often hidden ones that borrowers aren't even aware that they're paying until it's too late. Certain restrictions are already in place, but the problem is far from contained.
Another issue lies in back to back loans which rollover debt and create a never-ending cycle of interest, debt, and danger. A borrower can't repay the entire loan, and it's rolled over into a new one until the interest is so high it's nearly impossible to get out of. Don't let yourself be fooled by flashy ads or the promise of bad credit loans made easy. These loans normally don't even report to credit organizations and won't help your credit in the least – they'll only put you in more financial trouble. Simply put, there are better options out there for anyone, regardless of credit history.
For more valuable information, visit www.prudentcreditrepair.ca
