• 목록
• 답변
• 글쓰기
• 게시판 리스트 옵션
  • 수정
  • 삭제

Payday loans are a convenient option for people who need fast cash. These loans are typically deposited into a borrower’s bank account in less than an hour.

They are often used to cover unexpected expenses such as medical bills and car repairs. However, they can be very expensive. The fees and interest add up, and can cause a debt cycle that is difficult to break.

Payday loans are a form of short-term credit

Payday loans are unsecured loans with short repayment periods. They are usually repaid by the borrower’s next payday, and they typically come with high fees that add up to annual interest rates of 400% or more. A number of lenders offer payday loans, including banks and credit unions.

Payday lenders require the borrower to write a postdated check or give them authorization to electronically debit their bank account for the loan amount and fee. They then cash the check or automatically withdraw the funds from the borrower’s checking account on their due date, which is usually two weeks from the initial loan date.

Alternatives to payday loans include personal loans from local charities and churches, which are often less expensive than payday loans. You can also ask your employer about paycheck advances, which can be much cheaper than Payday Loans Portland loans and help you avoid paying late fees. Credit unions also offer payday alternatives, which have lower service fees and a longer repayment period.

They are high-interest loans

Many people with no credit or poor credit turn to payday loans for help. These short-term loans have fees and interest rates that can add up to 400% APR. These high-interest loans can trap borrowers in a cycle of debt. Fortunately, there are alternatives to payday loans that can help cash-strapped consumers. These loans are less expensive and report monthly payments to the credit bureaus, which can help borrowers improve their credit scores.

Although all debt has interest, there are huge differences in the interest rate charged on different types of debt. Mortgages and auto loans, for example, may carry low interest rates, while payday loans can charge triple-digit annual interest rates. To avoid these risks, it is important to research all the options available to you before applying for a high-interest loan. Many local charities and churches offer no-cost financial assistance for those who need it. They can help borrowers with their budgeting and provide helpful advice on how to get out of debt.

They are deceptive

A payday loan is a short-term, high-cost lending transaction in which the customer writes a personal check to the lender for the amount borrowed plus a service fee. The check is held for a few days until the borrower’s next payday, or until the debt is paid in full.

Pew’s Payday Lending in America report series has documented structural problems with these loans, such as their ability to trap consumers in a cycle of debt and their unaffordable lump-sum repayment requirements. These loans can cost borrowers an average of five months in interest for every $300 they borrow.

Some lenders even steal borrowers’ identity. For example, one professional racecar driver and his companies allegedly deceptively charged millions of dollars to customers’ bank accounts by repeatedly withdrawing payments and escalating non-sufficient funds fees.

They are not regulated

Many states have banned payday loans or capped their interest rates. But despite these efforts, the industry continues to thrive. In some cases, it has even found ways to evade state laws. For example, Georgia law prohibits payday lending to its residents, but lenders use brokering arrangements with banks to circumvent the ban. This practice is known as rent-a-charter.

Some of these companies offer payday loans with higher interest rates than traditional banks. This can lead to a debt trap for borrowers who are not able to pay back their loans. These lenders may also impose fees or penalties for late payments. These can be difficult to pay for borrowers on low incomes.

To avoid a payday loan, borrowers should talk to their employers or credit counselors for advice. These services can help them find affordable loans with better terms than payday loans. They can also offer budgeting and debt counseling. There are also nonprofit organizations that provide free or low-cost credit counseling.