Payday Loans

A payday loan is a small, short-term unsecured loan, “regardless of whether repayment of loans is linked to a borrower’s payday.” The loans are also sometimes referred to as “cash advances,” though that term can also refer to cash provided against a prearranged line of credit such as a credit card or directly linked to your checking account.

Payday loans are often times predators, due to the high interest rates. It’s almost impossible to make back your original amount, and many people find themselves in trouble. The loans are “easy” to get so many people have fallen victim. Payday loan offices targets low-income communities. You can drive down the street and see multiple areas to receive a loan. Know and be honest about your finances, and do not fall victim.

During the 2008 presidential campaign, Barack Obama promised to “cap outlandish interest rates on payday loans and to improve disclosure” of the short-term, high-interest loans. After years of partisan wrangling, the administration has essentially achieved its goal. Progress on this promise finally accelerated in January 2012. However, the Trump Administration will roll back Obama’s restrictions on payday lenders.

Alternative Ways to Avoid a Payday Loan:

  • Negotiate With Creditors. In most cases your creditors will understand if you have a temporary cash flow problem. … 
  • Take Out A Small Loan. … 
  • Pay With Your Credit Card. … 
  • Dip Into Your Emergency Fund. … 
  • Get A Cash Advance from Your Credit Card. … 
  • Sell Something Or Earn More. … 
  • Get Overdraft Protection. … 
  • Borrow From Friends & Family.

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