What You Should Know Before Getting a Payday Loan
Chances are, they don't know it -- otherwise why would they agree voluntarily to a deal that's also designed to separate them from more of their money?
The Insight Center For Community Economic Development in Oakland, Calif., estimates that payday loans cost the economy about $1 billion and, as a result, more than 14,000 jobs while consumers take on so much payday loan debt that they lose $774 million in spending ability. Bankruptcies linked to such loans climbed to 56,230 in 2011, the center reports.
Available in 33 states, the loans also come with huge interest payments, amounting to $375 on average.a long look at the "experiences and rationale" of payday loan consumers with the help of Harris Interactive. Don't expect a poll that views the industry in a negative light, obviously. But the group's survey insists that consumers are getting a good deal from payday lenders, noting that 91% of loan customers say they are "satisfied" or "very satisfied" with their payday loan experience. Additionally, 95% say they don't want the federal or state government getting in the way of their payday loans. Whatever you feel about any of the above statistics, go into a payday loan deal with your head up and your hand firmly on your wallet or pocketbook: payday loans, some have caps on the amount of interest the provider can charge. Check with your state's attorney general's office to see if there's a rate limit on your loan. Don't bounce a check. Always cover a payday loan within the agreed-upon repayment period. When you do, make sure you have the cash in your banking account to cover the payment. Bounced checks can lead to huge fees from loan providers. Consider a credit card advance. Instead of a high-interest payday loan, consider a credit card loan advance. You'll pay high rates -- but not as high as a payday loan. And you'll likely have a longer repayment period.
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