How to use payday loans to your advantage – PaydayWish

If you want advance money to pay for overdue bills, make an important purchase, or cover medical expenses, getting a payday loan from PaydayWishâ„¢ is a good option.

In this video we’re going to talk about how payday loans try to trap you in an endless cycle of debt so hit that subscribe button and turn on the notification bell so you stay educated on how your money works first let’s talk about what a payday loan is a payday loan is a short term high interest loan typically due on your next paycheck lenders know precisely when

Your next payday is because they monitor your checking account and as soon as there’s a large enough deposit they’ll automatically take back what they’re owed payday loans are commonly capped at five hundred dollars lenders charge fees of fifteen to thirty dollars per one hundred dollars borrowed if you take out a payday loan of five hundred dollars in the first of

The month with a finance fee of fifteen dollars on payday you’ll owe 560 in most states all you need to secure a payday loan is your id bank account information and proof of income so what makes a payday loan such a rip off defining payday lending is like giving a tour of a gas station bathroom it’s hard not to pause every second to point out something sketchy

Payday lenders will call their 15 per 100 a 15 finance fee to deliberately mislead consumers into thinking they’re paying 15 interest this might sound good even the average apr for credit cards is around 18 but payday lender’s 15 finance fee is not interest first 15 apr on a 500 loan for a term of four weeks is just six dollars and 25 cents a paid a lender’s

15 finance fee of 60 equates to 400 apr so even if you’re able to pay off your debt you’ll still get massively ripped off compared to other lending options payday lenders say they need to charge such insane rates because it mitigates the risk and according to pew the average payday borrow makes 30 000 per year and 58 have trouble meeting their monthly expenses

And unlike banks lending mortgages payday lenders generally don’t assess their borrower’s ability to repay the loan as a result nearly half of the payday borrowers default on their payday loans within 2 years so when you lend to a high risk group half of whom may default it’s fair to charge a little interest right yeah it makes sense and it’s entirely ethical to

Charge a teenager in a porsche more for auto insurance than a preschool teacher in a volvo but payday lenders don’t charge interest based on the risk they charge the maximum amount allowable by state law if your usual payday comes and there’s not 560 in your checking account you’ll be subject to these fees the first a rollover fee your payday lender will start

Your 500 loan tacking on another 60 for a total of 620 second they’ll also charge a late fee in addition to a rollover fee your lender may charge you a 15 to 100 late fee and third the overdraft fee your payday lender will repeatedly try to withdraw the 560 you owe around payday potentially resulting in multiple overdrop fees from your bank as a result of this

The average borrower who takes out a 375 dollar payday loan ends up paying back about 895 so how are payday loans so predatory as a lending option payday lenders are not even remotely competitive charging 20 times the interest of the average credit card that’s like mcdonald’s charging 80 for a big mac and yet there are more payday lender locations in mcdonald’s in

The us and how did they become so popular payday loans offer advantage over traditional bank loans or credit card debt first their instance bank loans take three to four days to process if you walk into a payday lender you can have 500 in your account in five minutes second there are no purchasing restrictions to apply for a bank loan you need to justify your

Expenses and plan purchases you can spend a payday loan on anything and third they’re available to virtually anyone with a paycheck over 53 percent of americans have been rejected for a credit card loan or car financing due to poor credit many of whom will turn to payday lending as a final option in essence payday lenders are well aware that they’re a last-ditch

Effort for many desperate americans looking to pay bills they then use the opportunity to siphon as much money from them as possible as i mentioned before payday lenders charge borrowers the maximum amount of fees allowable by state law piling fees overwhelm borrowers so quickly that 80 of payday loans are taken out to repay another payday loan so how is payday

Lending even legal payday lending is illegal in 14 states in 1998 dc capped interest rates at 24 explicitly to push out predatory payday lending and it worked but still around in 36 states and while legislators generally agree that the practice does more harm than good regulation has been very very slow so for the time being interest rates remain at 391 percent

So for the time being interest rates remain at 391 percent and the best things any consumer can do is take a look at your finances so what are your thoughts are you in the process of getting a payday loan are you thinking about getting a payday loan is a payday loan your last resort leave a comment down below and let’s get a discussion started and as always take

Care of your money today’s book of the day is the intelligent investor by benjamin graham i’ll leave a link to the book down below and if you prefer listening to it on an audio book for free i’ll also leave a link to a 30-day free trial to audible you can choose this book or any book to listen to and even if you cancel before your free trial is over you can still

Keep the book and listen to it whenever you want last thing before you go a financial education is the most important kind of education you can give your kids that’s why i created smart money parenting as a way to prepare you and your kids about the highs and lows of managing your own money i’ll leave a link to the course down below so you can check it out you

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How to use payday loans to your advantage – PaydayWishâ„¢ By Payday Wish