You may be in a tight spot and need a quick and easy cash fix, so perhaps you are consider taking out a payday loan. Afterall, these loans are convenient, so they seem attractive. However, it’s often unclear to borrowers how dangerous payday loans can be. So, before you rush over to your local payday loan lender, you should take the time to understand exactly what a payday loan is, how tricky they can be to repay, and realize why you shouldn’t use payday loans to borrow money. 

What Are Payday Loans? 

Payday loans are short-term cash loans that are meant to hold you over in a time of need. These loans are meant to be paid back by the time you get your next paycheck, usually within two weeks. You can apply for these loans at a local loan agency or online. These loans are typically a small amount of money with a large interest rate. Although the speed and ease at which you can obtain a cash loan is appealing, it is important to understand the danger of taking out payday loans. 

Why Payday Loans Are Detrimental to Your Finances

1. Payday Loans Are Expensive: Payday loans can have an interest rate as high as 400%. The high interest rates are due to the fact that most lenders do not check if a borrower is qualified to pay back the loan. 

2. Debt Will Accumulate Rapidly: The high interest rates and borrowing cycle allows debt to accumulate quickly. By the time you miss a few payments or take out another loan, you could be paying up to 10 times your borrowed amount.  

3. It Can Become a Never-Ending Cycle: Payday loans are attractive to desperate borrowers, but they are also predatory. Payday loans have high interest rates and pricy late and extension fees. If you decide to extend your loan or miss a payment, you are accumulating more debt and may not be able to make the next payment. If you decide to take out another loan to help pay off the first one, you are entering a dangerous cycle of payday loan debt.

Avoid Payday Loan Debt

In a time of need, payday loans can seem like an easy fix but using them can negatively affect your finances. At Progressive Debt Relief we can settle your payday loan debt effectively and discretely. Our debt counselors will work with you to create a plan with no upfront fees. If you have any questions about our services or want to schedule your free consultation, contact us today at 866-867-1493.