If you are suffering a financial hardship and worried about making ends meet the appeal of quick and easy cash can be tempting. The payday loan process seems simple enough, get money and repay it back with a little interest. What could go wrong?
When you get a payday loan you receive money contingent on putting up post-dated checks, paychecks or other funds up as collateral. When the repayment date comes along the payday lender cashes in their repayment plus interest. While this doesn’t sound too bad the harsh reality is that many people fall into the trap of over-borrowing and the inability to repay.
Typically, these loans carry very high interest rates; some as high as 400% annual interest rate. These rates are designed to keep the financially challenged trapped in a cycle where the lender milks the interest fees for as long as possible. When people find they can’t repay the minimum the loan gets rolled over and interest builds quickly. More often than not additional payday loans are taken out to make payments on the first. It is a spiral that happens quickly and most borrowers find themselves with garnished wages from the post-dated checks or paycheck collateral and further in debt than when they started.
Payday loans are bad for consumers and no one should have to suffer with additional debt because of them. If you are strapped for cash look into borrowing from family or finding ways to earn some extra money. If you are already suffering with debt contact a Dallas bankruptcy lawyer to ask about how they can stop payday loan collection and get you back on track.