The horrible truth about Payday loans. paydayloans.helium.com
I’ve held quite a few jobs in my long lifetime. One of them was as a branch manager at a payday loan place. Let me tell you how they operate. Their main objective is to trap you into repeat business so that they can keep collecting the fees. This is done by convincing you to take out the maximum amount you are qualified for based on your paycheck. In that way, the likelihood of you being able to pay off the entire amount on your due date is very slim. Say your paycheck is normally 450.00 and you qualify for a $250 dollar loan. Add the fee to that and you are looking at having to pay back $300 or more. You will have $150.00 left out of your check if you pay your loan in full. How many people can get by on that until their next check? The majority of the people will re-write the loan, incurring a new fee, and go through the same process all over again. However, at some point, you have to pay the entire loan off, and leave it go for a period based on whatever your state regulations require. That usually becomes a hardship on most people, and they might then go take out another loan at a different advance store. This creates a vicious cycle. I’ve seen it happen all too often. Most of my customers would keep retaking the loan and end up paying thousands of dollars in fees for the year. This is how the advance industry builds business. I know times are tough right now and money is tight, but if you end up in this situation you will be throwing quite a bit of money out the window that you could have used for other things, and create some more financial stress for yourself.
If you absolutely need to take out a cash advance, be smart about it. The only instances I would use one is to keep a utility from being shut off or to feed my children if necessary. And then, only take what you need and not a cent more. I know it’s tempting, but you will avoid more problems by doing this. If for some reason at the end of your term you cannot pay the loan off in full, pay down some on it. You are still going to carry a fee until the loan is paid off, but it will be much less each time and you will reach a point where you can pay the loan off in full and leave it alone. It’s also a bad idea to get more than 1 loan. Do the math and add up the fees to find out what the loan will cost you if you are not able to pay it back in full on the due date, the amount will shock you.