Payday loans come with their own set of issues when it comes to getting some instant cash. Though you may not be able to get a huge amount of money, the loan amount is generally sufficient to meet some immediate needs. However, payday loans can become an issue for the debtor if they are not planned properly. Here is a list of the issues that are faced most commonly with these loans. They are unsecured loans but demand collaterals- Though in principle they are unsecured loans, in practice the companies may demand some or the other collateral in order to issue the loan to you. This collateral can be your car or your house and you have to submit the papers of these collaterals upon application itself. In case, this is missing, your application will be rejected.
They only offer small amounts of loan- Most of the payday loans only offer very small amount of loan which may not be sufficient if you are looking for a bigger loan. The amounts generally range from $100 to $2000. You have to ensure that you get to see what kind of loan you are able to secure and all that you need is being met by these loans or not.
They have very high rates of interest- This is by far the biggest issue that the customers have been facing with payday loans. The rates of interest are so high that you might end up paying more than what is expected. The rates can go as high as $30 on every $100. If you get only a loan of $200, you can end up paying $260 which is not always a great deal when it comes to managing your finances. Plus, you will be deprived of a huge amount of your paycheck in the next month which can cause a lot
The payday loan companies may indulge in fraudulent practices- because of the unfair practices being adopted by some of the payday loans companies, this business is either banned or illegal in as many as 13 states of the US. In other states, the companies go out on making weird and unfair loan agreements just to mint some money from people when they are in dire need of some cash. This is especially harmful for people of the lower income group as they are not able to get all that they need and they have to pay more than necessary in the following month.
of problems for you.
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