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How often do you find yourself in need for borrowing money before the next payday?

A common issue which many face is “flat run out of cash” mostly during the last week of the month, after the exhausting of monthly earnings. Yes, it may seem exaggerated, but it holds true for most of the people, those who work all day long to earn their daily bread and butter (the middle-class section of the society).

But, have you ever wondered why you land in such problems; you don’t need to be a financial advisor to find the root cause. Well, It’s because we are not disciplined enough to handle our finances.

What is a payday loan?

A payday loan is an amount (usually small) of money borrowed from a money lending company to satisfy our present financial needs, and it has to be repaid on the next income day (the payday). A Payday loan is also referred with various names such as: paycheck loans, income day loan, etc.

Stay away from payday loan

Payday loans are among the worst financial products in the market today. They may seem like a great idea because they are relatively easy to apply and get, but there are 10 reasons people have to avoid payday loans-

1. Payday loans are there to take undue advantage of your needs- they are incredibly expensive

Payday loans are really expensive. The most expensive financial advantage “the credit card” has an interest rate around 28 to 32 percent (usually). How about a financial service that has an interest rate 10 times the credit cards, “the payday loans”, Taking a 100$ small loan and paying 15 to 20$ as interest, is that makes sense? Then why this loan type has become popular today, may be because of our foolish minds or poor mathematics. 

Payday loan companies are always in look for individuals, those who fail to qualify for mainstream loans. Better get personal loans. If you have a bad credit then this is a problem. In this case you can use verified bad credit loans with minimum risk.

2. They are too easy

They are too easy to get, you are sure to get it with your first visit to the payday lender’s office. However, it takes a significant amount of time for most mainstream bank loans, therefore giving a handsome amount of time to think, consider, and rethink. And, if your spouse or any member of the family changes your mind on having a payday loan, then there will be not backing out with payday loans.

3. Payday is not a safe option

For a small sum of money, giving all your bank credentials to an unreliable payday Loan Company is that right? They’re many fraud listed payday companies which are there only to grab your confidential bank details with the lure of lending you some money.

4. idden fees

 There are usually some hidden fees with payday loans which many firms don’t disclose to you at the time of money borrowing, but surely will hurt you at the time of repaying the loan. So, get ready for some ugly hassles because these guys have the habit of not committing to their words( ifyou own a payday loan). This is how they earn their money!

5. Aggressive collection policies

It is always advisable to think positive, but one should also be ready for the worst (failing to pay back the loan)

A big reason payday loan has come under the radar of many countries is because of the aggressive collection policies associated with it. Some payday firms threaten their clients with garnishment of wages and persecution, in turn forcing their customer to pay off his (or her) loan. These practices are typically illegal and if you face this kind of treatment, then without any hesitation you should take the help of law.

6. Your Financial Woes Could Get Worse

With a payday loan, you have to immediately pay back the loan, right when you get your salary paycheck. But, imagine what if you don’t get the check on time or you have lost your job, it will be a messy situation, and your financial woes are sure to worsen.

7. Payday loans are illegal

Many countries and stateshave imposed a ban on the payday loans and have termed it as “illegal”. However, payday lenders are operating through the Internet, and offering loan to the most vulnerable section of the society. So, be aware of them.

8.Long term consequences

Even one payday loan can haunt you for years. Not only through high-interest rate and hidden fees, but payday lenders are known for selling your personal details to scam payday companies. These fake companies will harass and threaten you for paying debts “that you don’t owe”. They will contact your relative, your employer, and your neighbors. Mental torture!

9. A Payday loan can start a very vicious circle.

Yes, payday loans are indented for people with a regular stable income who just run out of cash. However, the market of payday loan has evolved because of the individuals who are struggling with debts. The ease with a payday loan can be obtained seduce these folks to take a loan for paying debts of other previously owned loans. A loan for loan and the cycle goes on till eternity for them.

10. Bad impact on your credit score

A payday loan has more of role negative impact on your credit score. 

The bottom line

 There is no such thing as easy money (as many payday lending firms advertise). While payday loan is easy to get, they defiantly make you pay big in the long run. The next time when you are tempted to take a payday loan, remember these above points and all your temptations will blow up in the air like a helium filled balloon.