Anyone who has ever been stuck in a tight financial situation that threatens the ability to make ends meet knows the panic that can set in. Many people are tempted into decisions like taking out a payday loan because of this level of panic. The problem is they, more often than not, end up worse off than had they not taken out that loan to begin with.
According to a recent study, some pay day loan companies are charging an average of 473% interest. That means nearly $15 in interest per $100 loaned, per week. If you borrow $1000 you will be paying $150 in interest charges alone per week in addition to the payment portion that goes towards repaying the loan balance. If you are scheduled to repay the $1000 in 8 weeks, that is $125 a week applied to the loan balance plus the $150 in interest; totaling $ 275. Over the 8 weeks of payments to repay the loan balance you will have paid $1200 in interest fees. That is more than the actual loan itself!
So you can see how these types of loans can quickly escalate with fees. The trouble gets worse if you can’t make your weekly payments, which is very often the case. Defaulting on a payday loan only makes your financial situation worse and you are likely to end up on the receiving end of some abusive collection practices. These lenders can threaten asset liquidation, wage garnishment, and some even go as far as falsifying legal documents of impending lawsuits.
If you or someone you know is suffering in the vicious payday loan cycle, contact a Dallas bankruptcy lawyer right away. You can stop the threats and even terminate any future payments you owe to these lenders.