Payday lenders like to tout their products as “easy,” but the truth is that these are deceitful people. They are looking to take advantage of those in tough spots. And payday loans won’t help your situation. In fact, they’ll only worsen it.
If you take out a payday loan, you have to pay it back. It is very likely that you will wind up with less money than before. Sometimes, my clients struggle to pay back these loans, often for reasons beyond their control. When that happens, the phone calls won’t stop.
Debt collectors have threatened my clients with many lies: The police are on their way to arrest you. There’s a judgment against you for a bounced check.
I want to talk about how these shady products work—and why you should consider bankruptcy to break this cycle.
What is a payday loan?
It sounds simple in theory: a small amount of money to be repaid when the borrower gets their next paycheck. Of course, they come with a very high interest rate.
Let’s say you need to borrow $100 until your next payday. You’ll write a postdated check — to be automatically cashed on payday unless you extend the loan — for $100 plus a fee. The fee might be a percentage of what you borrow, or a set amount for every dollar borrowed. Extending the loan allows you to keep the loan for another period, but additional fees will rack up.
If you have to take out a payday loan in the first place, there’s a good chance your finances aren’t in great shape. This is where a bad situation gets even worse. Lenders can transfer your accounts to outside debt collectors, who harass you with nonstop phone calls.
Getting Help in Hard Times
Unlike the inescapable cycle of high-interest loans, bankruptcy can actually bring lasting financial freedom. If you’re looking to solve your financial problems sustainably, I’d love to discuss your options with you. Contact us here or call (901) 327-2100 to get started today.