When Payday Loans Shake your Financial Stability

Are you planning to avail a payday loan again? Is it the best choice you can have? Payday loans exist for more than twenty years in America. In fact, around twelve million Americans use it annually. This allows a person to have a short-term loan payable with his/her next pay check. Of course, previous payroll and employment records are the requirements before availing a payday loan. But is it really advantageous? Payday loans goof for some. You will know why.

Lenders do not really need it sometimes. This is one of the reasons why payday loans goof for some. Maybe they just want to know how it feels when you have received the money from the payday lender. Also, it could be possible that they just want to buy the latest pair of shoes at Prada and even that glittery bag at Chanel. These kinds of people simply choose to use the money exchange they get without thinking about the bad effects it may cause them. According to the study conducted by Pew, if payday loans do not exist, 80% of consumers would have become frugal. This is one fact that people who are fanatics of payday loans can’t deny.

Combating debt

Payday loans escalate debt. Here comes the sad part, when you need to pay your debt. It has been that certain part everyone is afraid to face. The loan percentage would also be the basis of the amount you would be paying in return. This thing applies to all lending companies. Certain government agencies are highly aware of this and lenders must pay it all. Moreover, the percentage varies from one state to another.

What if you belong to a state that observes a higher percentage? That can really give you headaches. When payday arrives, you will not feel that you actually received your salary because you have to give it to the lending company as payment. Or worse, you will not have enough money to pay the http://mypaydaylender.co.uk loan. So this marks the beginning cycle of payday loan again. This sad scenario is rampant according to Pew. How many times will this happen over and over again? The Pew Charitable Trust conducted a recent study and they found that 69% of first-time borrowers do not need the money for emergency situations but for everyday necessities. Repetitive loans follow. These prove that payday loans goof for some.

Deciding to borrow

If these would not persuade you that payday loans goof for some, listen to the words of notable people in the country. Kathleen Day, the spokeswoman for Washington D.C from the Center of Responsible Lending said that “payday loans are legalized loan sharking designed to get people into debt.” Are you not shocked of that? Would that be a mind boggling question to lending companies who puts high-interest rates?

Have you made up your mind whether you will get that next payday loan? Are you convinced that payday loans goof for some? Maybe all you need to do is set your priorities, budget your money and spend it wisely. This is simple yet effective. Just think that payday loans aren’t made for you.