1 min read

Getting Sucked Into the Payday Loan Spiral

Getting Sucked Into the Payday Loan Spiral

You hear and see the payday loan advertisements everywhere. At every corner and all over the internet you will see” Borrow $500 in 15 minutes, no credit check required!” Sounds convenient and easy right? In reality, it really is that easy HOWEVER it’s easier to get sucked into the payday loan spiral.

The Problem

The problem with a payday loan is that you’ll become trapped in a web that’s impossible to escape. With a payday loan you are borrowing against a future pay. The interest rate is extremely high so when 2 weeks roll around and you can only afford to pay off the interest, you carry the loan forward and then the next pay turns into the next pay and before you know it, you’re not paying off the loan and wasting A LOT of money on interest.

What To Remember

You must remember that a payday loan company is disguised as a beneficial route for you but they are happiest when you’re paying them a good chunk of money on interest rather than paying off your loan. This is how they survive. You must also keep in mind that if and when you default in payments, it will be reported to the credit bureau and your credit score will be tarnished.

What Are My Options

You should avoid taking out any more payday loans, seek other alternative lenders that offer a better interest rate. More traditional lenders will even help rebuild your credit by reporting all payments to the credit bureau.

Save your money, your credit rating and your financial health.