Yes, payday loans are generally a bad idea that should be avoided at all costs. Here’s why: Payday loans are very costly with extremely high interest rates and very short payback periods that are designed to keep you coming back again and again to take out a new loan. Each and every year, millions of people get caught in a vicious cycle of debt by predatory lenders.
Payday loans are generally available to anyone with a steady paycheck and a checking account. These types of loans are mostly patronized by individuals who don’t have access to back up cash in a saving or a credit card. Another disarranging remark against these types of loans is that the interest rates can range upwards from 400% to as much as 5000% interest! For quite some time these types of loans were relatively unregulated, but since have been put under the watch of the Consumer Financial Protection Bureau (CFPB), and some states such as New York have banned the practice altogether.
Before taking a payday loan, ensure that the expense is an absolute necessity, and also weigh the balance if you get into a situation that you have no other recourse than to take a payday advance, it is imperative that you pay back the loan on time as penalty fines can be quite hefty.
If you’ are currently stuck having to go back and take out a new payday loan every other week just to pay back the last one, you are paying interest on that money. If you are unable to break the cycle yourself and want professional help a certified credit counselor or an Ohio bankruptcy attorney will be able to advise you on how to take back control of your financial destiny.