Pitfalls of Payday Loans
Payday loans are narrow term loans that are usually used to overcome moderate financial problems. Such kind of loans is also known as a microcredit. Payday loans are often allowed for the short term (from few days till 2 months). These loans are very popular nowadays because of their availability. Obtain a credit can everyone who has mean income. It’s enough to have document to proof an identity. But, unfortunately, the situations in which such loans are useful are very few.
Payday loans keep back much enough pitfalls:
- The first hidden danger is that you borrow money at high interest. They are extremely expensive. You have to pay for urgency. You are to pay annual percentage rate that may be of 1500 presents! And if you fail to pay on time they will charge more interest for every overdue day.
- The first pitfall entails the next one. If you fail to pay on time the organization will blacklist you. And everybody should remember that all banks have common “blacklist”. Thus your forgetfulness or disorder may bring further some great problems.
- Many lending firms secrete the fact that a borrower can “freeze” his or her percentage rate. For example, if you fall ill or have another reasonable excuse you may suspend a casting interest. It is simply disadvantageously for them to inform clients about it.
- Most lending firms may arrest documents of their clients. They argue such actions the fact that they should have your documents in security of client’s repayment. And if you give such firm your passport YOU will bear administrative responsibility. It is absolutely lawlessly.
- The last hidden danger is that all your relatives and authorities will be informed about your decision to borrow money. Do you want such outcome?
All aforesaid doesn’t mean that you should never use payday loans. It only warn you that it is very risky enterprise and a potential client of lending firms should learn all refinements of borrowing money and be very attentive to not to fall into the debt trap.