When you need cash fast, payday loans may seem like a good idea to get
the money you need. After all, the lending companies that offer these
loans market them as fast, easy ways to get money without having to undergo
a credit check, wait for a complicated loan approval process with the
bank, etc. The reason that these lenders are able to provide borrowers
with lumps of cash so quickly is that, when borrowers take out these loans,
they are essentially agreeing to pay back the lender within about 30 days
(or, in other words, with their next paycheck – hence, the name
Although these types of loans may be particularly attractive options –
especially if you are like so many Americans who are living paycheck-to-paycheck
and you suddenly need cash for something like an expensive car repair
bill, it’s crucial that you are aware of the dangers of payday loans
before you take out one of these loans and possibly get yourself into some
Here in an in upcoming second part of this blog, we will outline 5 important
reasons that borrowers should avoid taking out payday loans when or if possible.
Reason 1: Payday loans have VERY high interest rates.
The old cliché –
if it’s too good to be true, then it probably is – definitely applies when it comes to the quick money offered by
paydays loans without credit checks. The fact is that the proverbial
catch to these loans is that there are associated with extremely high interest rates.
Namely, payday loans’ interest rates can be anywhere from 30 percent
to as much as 100 percent of the principle of the loan borrowed. This
can spell trouble and give way to serious debt in a matter of a few months,
and people who are considering taking out payday loans need to be aware
of this before they potentially get themselves into trouble.
Reason 2: Payday loans have VERY short terms.
In fact, most payday loans require borrowers to pay them back (with interest)
within about 30 days or so of borrowing the money. In many cases, borrowers
will need to use their next paychecks to cover their upcoming living costs,
which typically means that:
- They won’t be able to repay the payday loan when it is due.
- The astronomical interest rate will immediately start kicking in.
- Borrowers will likely be stuck paying back the payday loan for months (or
possibly even years) to come.
Look for our second part of this blog (which will be posted next month)
for more important information on the dangers of payday loans.
Lincoln City Bankruptcy
Are you struggling with serious debt due to having taken out a payday loan?
If so, contact the experienced
Lincoln City bankruptcy attorneys at Andrews, Cramer & Ersoff by calling (541) 994-7350 or by emailing
us using the form at the upper right-hand side of the screen. While we
can provide you with additional information about our services, we will
also give you professional legal advice regarding your best options for
proceeding with your financial affairs.