| Stopping the Cycle--Getting Out Of Payday Loan Debt |
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| Written by Susan Taylor |
| Sunday, 18 April 2010 17:43 |
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Does it seem impossible getting out of payday loan debt? When you add up your bills at the end of the month does it seem like you have absolutely nothing left? Countless consumers take advantage of payday loans every day without actually understanding how their rates are calculated. As a result, many find themselves in desperate financial situations.
Does it seem impossible getting out of payday loan debt? When you add up your bills at the end of the month does it seem like you have absolutely nothing left? Countless consumers take advantage of payday loans every day without actually understanding how their rates are calculated. As a result, many find themselves in desperate financial situations. Payday loans are designed as short term lending solutions for people who either do not qualify for a traditional loan or need money faster than a traditional loan can be processed. The high interest rates associated with payday lending are meant to discourage their use as a long term financial fix. Many consumers, unfortunately, do not understand the basics of payday lending. Some unknowingly agree to loans with the assumption that the interest rates will be manageable and very near what they can find at the local bank or credit union. When in reality, many payday loans have interest rates well above 100%--which can make an impact on the amount owed quickly. Once the cycle has started, how do you stop it? Avoid an extension if at all possible. Typically, on a $300 loan, consumers are charged a $90 extension fee. This fee does not apply to the principle of the loan. After the extension, you will still owe the orginal loan amount plus finance charges. Second, if you can not pay off the entire loan when it is due, pay down as much as you can. With interest rates in the triple digits, paying $10 extra per pay cycle can and will make a difference fast. You may have to ask to make this arrangement. Avoid taking a second loan to pay off the first at all costs. It will not solve anything. Instead, work to pay down the original loan by making small payments toward the principle when possible. Nine times out of ten, a company will find a way to work with you if you are having trouble making your payments and you are sincere about repaying your debt. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Need help getting out of payday loan debt? Let me show you how you can. You are welcome to reprint this article - but get your own unique content version here. |