PayDay Loans Are Just Too Expensive

Are pay day loans the answer to low bank accounts? Is there any harm in using services that offer pay day loans? Some may feel that paying bills with borrowed money is better than receiving bad credit marks as a result of not paying the bill, which is understandable.

The issue with the pay day loans is they just cost too much. The usual APR is between 350 - 650% according to the CFA (Consumer Federation of America).

A loan in the amount of $100 may range in cost between $15 and $30. If in the case the loan is not repaid by the date, it could be renewed with an additional fee per each renewal. A loan of $100 could easily cost $60 in finance fees if the loan was renewed 3 times.

Pay day advance loans could lead to more debt and more problems.

Individuals experiencing debt should seek no cost or low cost credit counseling from non-profit organizations. These organizations could help with reducing current interest rate charges and lowering monthly payments.

If you have budgeting problems, seek the services of a financial planner that can help you manage money so that use of credit could be avoided.

There are many solutions available for personal loans. These lenders cater to situations of poor credit as well. There are secured and unsecured loans that can be taken out.

Secured loans require collateral.

Pay day loans are just too expensive. According to the CFA (Consumer Federation of America), the APR runs between 350 - 650%. Since these loans typically cost anywhere from $15 to $30, you could easily spend too much on the financing fees. There are many low cost alternatives.