The process is simple enough. A borrower writes a personal check for the loan amount and walks out with cash. While payday loans may seem like the answer to a budget crunch, they usually end up causing financial problems and are often the beginning of an expensive cycle that can seem almost impossible to escape.
Once you get caught in the trap of payday loans, it can be difficult to get out. Here’s how it happens: You pay the original loan amount and take out an additional loan for 10 to 14 days. After the second loan is due, you write another postdated check and obtain another loan. Now every two weeks you find yourself needing an additional loan - it’s an endless cycle of debt. For instance, the typical payday loan customer pays $840 yearly in fees on a $200 loan. That’s in addition to the original loan amount.
If you’re struggling with your budget, don’t obtain a payday loan to get you through. Payday loans only provide a temporary solution to an even bigger cash flow problem. If you’re having a budget problem and don’t have an extra $300 now, it’s unlikely you will have an extra $300 when your next payday comes. In short, proper budgeting is the solution to avoiding the need for another payday loan.
If you think you need help, call 1.800.698.0851 or visit our debt management partners at www.trinitycredit.org today.