Beware of Payday Loans
- April 8, 2016
- By: Beth Luke, GreenPath Partner Relations Communications Specialist
Payday loans are short-term, high interest loans that are very easy to get. Beware of Payday Loans though. It may be convenient to stop at a local cash advance store on the corner and tempting if your budget is tight. But, you should avoid these high-interest loans, at all costs! Consider the facts:
To get a payday loan, people usually gives the lender a post-dated check for the amount borrowed, plus fees and interest. The lender hands over the amount in cash, and waits to cash the check for a period of time, typically two weeks.
But what happens if the borrower doesn’t have enough in their account to cover the check? They must either pay a service charge and write a new check, or take out a new loan to pay off the current one.
Often people are still in a bind after paying off the loan, creating a cycle that is hard to break. In fact, more than 80 percent of payday loans are followed by another loan within 14 days.
And payday loans are costly. Payday lenders typically charge 400% annual interest or more!
Payday loans can be the first step to a serious financial problem. Before you consider a payday loan, reach out to GreenPath Financial Wellness. Our financial experts can provide personalized assistance to explore your financial options and choose the path that’s best for you. Call us at (800) 550-1961.[/vc_column_text][/vc_column][/vc_row]