Before you go to your nearest store or a website for a payday loan, there are some important things you must know about the process. Understanding fully what you are getting into with a payday loan can make a world of difference for you. Don’t get lulled in by the promise of fast, easy cash without first investigating the strings attached. What seemed like a painless solution for many has so often brought them instead anxiety, increased financial difficulty, and the feeling of being trapped.
How Do Payday Loans Work?
Getting a payday loan is easy, and that’s what makes it so appealing. You request the amount of money you need, typically ranging from $100 – $1000. The lender will give you the associated lending fees for the amount you request. If you accept the terms of the loan, they will ask you for a check in the amount of the loan plus the applicable fees. Alternatively, they could request access to your bank account to manually take out however much you owe at the end of the loan term. The loan length is usually two weeks, since that is when your next paycheck will come in.
How Are Payday Loans Dangerous?
The trouble starts when you can’t pay the loan back the first time. What happens when you decide not to pay back the loan amount plus the loan fees after the first two weeks? Payday loan companies will let you extend the length of the loan for another payment of the loan fee. So, when your two weeks is up, and your loan fee was $30, you pay $30 more to extend the loan for another two weeks. If you continue to fail to pay back the loan, several payments of the loan fee can add up quickly, and then you find yourself trapped in a cycle.
What are Other Terms for Payday Loans?
Payday loans are intended to be small amount, short-term loans to give you a quick influx of cash between paychecks. Though they are commonly called payday loans, you might find them called by several different names: payday advance loans, cash advance loans, small dollar loans, payroll loans, or salary loans. Just be aware that payday loans come in many guises, so don’t be fooled into taking one without realizing what you are doing.
How Do I Break the Payday Loan Cycle?
Progressive Debt Relief can help those trapped under payday loan debt. We’ve worked with many who thought they’d never be able to break the cycle, and they are now back on their feet with a manageable payment plan. We can help you reach a reasonable settlement with the leading payday loan companies so that you can breathe easy again. For a free consultation, give us a call at 1-877-590-1847 or submit our contact form.
