Payday loans hurt more than they help

On Behalf of | Feb 27, 2017 | Credit Card Debt |

Money struggles are an issue for many South Carolina residents. Living paycheck to paycheck simply seems to be the norm these days. What happens, though, when funds run out before the next payday? Quite a few people tend to turn to payday loans, but in the end find that they hurt more than they help.

What is a payday loan?

A payday loan is a type of loan where a lender supplies money as a cash advance on one’s upcoming paycheck. These are advertised in a way that make people believe they will help them get through a tough spot when they do not have enough money to go around before getting paid again. The funds are usually granted instantly, so if you need money now you can get it.

In order to receive a payday loan, you simply apply with a lender, either at a brick-and-mortar store or online. Once the approval of your load takes place, you will receive the funds requested, and all you have to do is write a post-dated check for the loan amount and any lender fees. When your next payday arrives, the lender will then cash the check.

Why should I avoid payday loans?

If I can get funds right when I need them, why are payday loans a bad thing? The loan amounts offered are usually pretty small and the interest rates and fees tied to payday loans can be astronomical.

On top of those issues, borrowers often find paying back these cash advances to be rather difficult. This creates a cycle of borrowing and a lot of money lost in fees and interest. These loans can also have an extremely negative impact on your overall credit score.

Are there alternatives available?

There are alternatives to payday loans that may better suit your needs. These include:

  • Living without
  • Taking out a conventional loan
  • Taking out a personal loan
  • Turning to family for help

If you find yourself in a financial hole that seems insurmountable, legal options to deal with the debt may also be a viable option for you.

Break the cycle, get real help

When in need of quick money, payday loans may feel like the answer. But, at the end of the day, taking out these cash advance loans are more likely to put you in a worse position than the one in which you started.

Relief from payday loans and other debts may be sought through legal means. An experienced bankruptcy attorney can provide more information about this topic and will be able to review your situation and assist you in pursuing a course of action that will best benefit your circumstances.

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