Tip 1: Stay Away from Payday Loans
Payday loans seem like a good idea to people in tight financial situations. Processing is easy and you can get money faster than any other type of loans. These loans are also offered in very low monthly interest rates. Unfortunately, all these things are just a facade to make payday loans sell. We at iateneo.com understands this and will show you why payday loans must be avoided.
Despite low monthly interests, payday loans will cost you a lot more. This is because payday loans have a set number of months for you to pay it off. A payday loan may have a six percent interest but is set to be paid completely for six months. That means you will incur a total of 36% in interest. In addition since it is written in paper even if you choose to pay the entire amount in less than six months you will still be paying it plus the interest for six months. There are also other setups where you to pay the loan via post-dated checks. The problem occurs when paydays get delayed making late payments incur substantial penalty fees. Add to that all the processing fees involve to make the release of payday loans fast. Overall, the total costs will be so much bigger than the amount you are loaned.
Easy loan renewals are meant to trap the debtor into a paying cycle. Renewals can be done for as low as $30 instead of the total payable amount of, let us say $330. This will make you think that you can pay less per payday and still get enough cash from your salary. However, if you continue paying this way for three months you end up paying $360 and still owe $330. You just doubled the loaned amount that you should have paid for on your first payday where you paid only $30. Typical employees cannot see the effects of paying just a portion of the loaned amount in the long run. All they see is that paying for $30 is a better deal than paying $330. They failed to see that paying $330 right away would only cost them $30 onetime payment instead of $390 in three months.
If you are really in need of cash now you can always avoid payday loans and choose the better options available for you. The best option is the one with no interests and that would be borrowing money from your family. They might even give the money instead of loaning it to you. If you think, it is too much of a burden for them then an advance salary for your employer if they offer it. You can also get low interest personal loans from banks.
Basic financial education is very important that is why we at iateneo.com are providing this much needed information to help individuals in tight financial situations to avoid getting into a deeper whole. Payday loans will get you into a situation that is way it must be avoided.