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Facts about Payday loans

Payday loans are great for people with no credit or bad credit

As many people know, America has been in a recession for some time now.  Many people have bad credit, simply for reasons out of their control.  Losing a job can make bills go unpaid.  These companies will report late bills or unpaid bills to the credit bureau and will hurt a persons’ credit.  Banks and credit card companies won’t lend to these people.  They simply can’t afford the risk involved.  These financial institutions are even more strict than ever because of the uncertain financial times.

Where do people with bad credit turn when they need emergency money?  Their options are limited.  Payday loans are the most logical.

People with no credit find themselves in a similar situation.  It often times takes a co-signer to get a credit card.  Very few people want to be liable for someone elses debt!  Or people can get a  high interest credit card to establish credit, but it takes weeks to receive a credit card and it takes months or years to establish good credit with a high interest credit card.

Where do people with no credit turn in financial emergencies?  Overdraft charges cost a fortune!  Payday loans can help people avoid these hidden fees!

Payday loan interest rates

Many people know about payday loans and at times they have been scrutinized for the fees that come with payday loans.  People can expect an average of $15 for every $100 they borrow.  It is important to remember that they are short-term loans (they can be rolled over).  The fees average out to be a higher interest rate than traditional loans simply because there is no collateral involved, no credit check and easily deposited to a customers’ checking account.

• Banks will charge people $35 overdraft fee on a checking account!  This is consistent with all major banks in America.
• They will charge $20 for bouncing a check.
• They will charge $20 for receiving a bad check.
• Some banks will charge monthly maintenance fees of $6

These fees are outrageous compared to the price structure of payday loans.  Payday loans are heavily regulated by the state governments and federal governments to protect consumers.  They are required to tell people about fees.  Meanwhile banks have hidden charges to milk money out of consumers. Banks are big corporations that bribe politicians in Congress.  These special interests prevent congress from protecting consumers from hidden fees set by banks.  These bank fees can equal annual interest rates of over 1000%.

For example, if a person thought a paycheck cleared and it didn’t (some banks take 5 days for checks to clear).  Say they overdrafted on a $10 lunch.  Had a $50 check bounce that same day and overdrafted for dinner @ $20.  Then went to get groceries because they realize that they don’t have enough money for the week and spent $20 on Ramen noodles and overdrafted again.

Lets add up the hidden charges from the above paragraph.

Lets say that this person is stupid and does this once per month

Here is the math if a person decides to get a payday loan because they were not sure if their check would clear.

This is why payday loans make a lot of sense to a lot of people.  This money could go towards credit card debt or in a ROTH IRA for retirement!  You could retire a millionaire by the money you save from payday loans