Payday Loans: 5 Reasons to Avoid These When Possible (Part 1), here are three more issues that borrowers should consider before they
take out payday loans. If you have more questions about the dangers of
these loans or would like some professional advice specific to your financial
situation, contact the Lincoln City bankruptcy attorneys at Andrews, Cramer
& Ersoff Attorneys at Law.
Payday loans can devastate borrowers’ credit and quickly increase
their debt. It’s always better to consider alternatives before taking
out payday loans.
Reason 3: Payday loan debt can exponentially increase if you can’t
immediately repay it.
For many payday loans, the term of the loan is about 30 (or so) days. This
means that, after a month is up, borrowers will be called to repay these
loans or face interest rates that are greater than 100 percent (in some
cases). Because many of the borrowers who take out these loans are living
paycheck to paycheck, by the time they receiving their next check, they
usually need to use these funds to cover their living costs – rather
than paying off their payday loan.
This creates a lose-lose situation for many borrowers, and it can entrap
them into snowballing debt that could take them months – if not
years – to climb out of.
Reason 4: Payday loans can devastate your credit.
Given the way that the debt associated with payday loans snowballs, it’s
usually the case that, as the debt grows bigger each month, borrowers’
credit gets more and more damaged. This is because their debt-to-asset
ratio continues to increase while creditors may report missed payments
to the credit reporting bureaus.
Although borrowers who are desperate for cash and are living paycheck to
paycheck may not be so concerned about their credit right now, making
choices that devastate their credit can create additional long-term financial
problems for themselves that can, in some cases, take years to repair.
Reason 5: There may better, cheaper alternatives to payday loans when borrowers
The fact is that, in some cases, borrowers may have other – better
– options when they need money and that they should explore these
alternatives before taking out payday loans. Viable (and typically better)
options may include:
- Borrowing money from family members
- Asking for paycheck advances from employers
- Selling or pawning some personal items
- Asking creditors for a grace period on payments (some may push back the
due date for payments or possibly even give you a reprieve for a month,
which can free up cash for other necessities).
Lincoln City Bankruptcy
Attorneys at Andrews, Cramer & Ersoff Attorneys at Law
Matters related to bankruptcy need to be handled with the utmost care to
ensure that debtors’ rights are properly protected and that their
financial issues are resolved as favorably as possible.
Regardless of whether a business or individual is considering filing for
bankruptcy or whether either has a history of previous bankruptcies, the
Lincoln City bankruptcy attorneys at Andrews, Cramer & Ersoff Attorneys at Law can provide our clients
with the support and professional legal assistance necessary to protect
their interests and rights at every stage of the legal process. Our primary
goal is to assist our clients in settling and moving past their financial
issues so they can focus on their personal success and future.
Contact Us Today
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.