If you’re looking for some quick cash to get out of a bind, a payday loan might be tempting. However, it’s important to understand the hidden costs behind payday loans so you can determine whether or not it’s right for you.

The Actual Cost

The first thing you’ll want to look at when you’re deciding whether or not a payday loan is right for you is the actual cost of that payday loan. It might not seem so bad to pay $20 or $30 in a week to have some extra money in your pocket right now, but it actually can cost you significantly more in the long-run. 

For starters, payday loans often have an APR of 400% or more — that’s more than 10 times the maximum allowed rate for a credit card. Not only that, some charge expensive fees if you don’t make your payment on time. Plus, that extra $20 or $30 is going to set you back on your next paycheck, which makes the cycle all the more likely to repeat itself.

Negative Effect on Credit

One of the biggest things many people don’t consider with payday loans is how they hurt your credit. The interesting thing about payday loans is that they aren’t generally reported to national credit reporting companies, which means you don’t benefit from taking out a loan and paying it off on time. However, this is difficult because if you don’t make payments when they’re due, the payday lender can file a lawsuit or sell your debt to a collections agency, either of which would have an impact on your credit. In short, the only thing a payday loan can do is hurt your credit.

A Better Alternative

As you can see, payday loans aren’t a great idea. If you’ve recently taken out a payday loan that you were unable to pay back on time, Progressive Debt Relief can help. We have established relationships with numerous lenders, allowing us to negotiate on your behalf to make sure we find the best solution for you. To learn more about how we can help you squash your debt, submit our contact us form or give us a call at (877) 590-1847 today.