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The problem with payday loans 

On Behalf of | Jul 5, 2022 | Bankruptcy

Sadly, millions of Americans are currently struggling to get by each day. The cost of living is skyrocketing and wages simply cannot keep up. All it takes is one unexpected bill, like a car repair or hospital trip, to put families into serious financial trouble. 

Payday loan companies claim that they can help people get back on track, but is this really the case? Outlined below are some of the main issues with taking out a payday loan

They will cost you a fortune 

The interest charged on the average payday loan makes that of even high-interest credit cards look insignificant. High-interest credit cards tend to fall somewhere between 20 and 40% APR. The average APR on payday loans is almost 10 times that amount. 

Missed payments can spiral out of control 

You may have filled out the application for a loan honestly, but made a simple miscalculation. This means that you cannot afford the repayment plan. Not only will extra charges be incurred on the account this way, but your bank may also charge you fees for not having enough to make the payments. 

Aggressive debt collection 

Some payday loan lenders are notorious for being relentless in their debt collection techniques. You may be bombarded with letters, phone calls and even visits to your home. Remember, even if you have fallen behind with payments, debt collectors must abide by the law at all times. They can’t simply turn up when they feel like it, call you late at night or cause you to feel harassed.

In terms of loans, if it sounds too good to be true, then it probably is. If you’re in financial hardship and considering bankruptcy, make sure you seek legal guidance before making your next move. You may be pleasantly surprised by how many suitable remedies are available to you.