Reconsider Payday Loans

Have you ever considered a payday loan? Don’t. While the cash is quick, it can leave you with more financial burden than you started with. Like with any product or service, it’s important to take the time to educate yourself and know your options.

What is a payday loan? A payday loan is a short-term, unsecured loan that is typically for a small amount. The term “unsecured” means there is no collateral required for the loan.

For a consumer with poor credit or other financial restraints, a payday loan might seem like the best, and possibly only, option. You know the old adage: “If it’s too good to be true, it probably is.” Well this saying often applies to payday loans. The truth is, while you may be able to get the cash quickly and easily, these loans come with potential risks and disadvantages. The most apparent risks are high interest rates and costly fees.

Let’s take a look at some payday loan statistics:

Are there other options?

Yes. Many banks offer personal loans, small collateralized loans, and small business loans. Bank loans are usually for longer terms and larger amounts of money than payday loans. Also, the APR and associated fees are much lower than payday loans.

Another great reason for getting a bank loan is, unlike most payday loan companies, banks typically report to the three credit bureaus: Equifax, Experian, and TransUnion. This process is very beneficial to consumers because it shows their positive pay history, which helps build and increase credit scores.

Payday loan companies often advertise to be convenient, cater to consumers with poor credit, and may seem like the best place when your choices are limited. However, it’s important to remember the risks involved and the financial situation they can potentially put you in.

If you would like more information about the different loans available to you, or if you’d like help building your credit score, please contact me or your local banker to get advice and find solutions.

Knowledge is power!