Article by Jimena Molina
Payday loans are available in many forms. Some people are lucky and have friends or relatives that will lend them money until their next payday. However, most payday loans are made with banks, credit unions or payday loan companies. The loans companies rely on the financially unfortunate to keep their business profitable. Lending money to people in trouble is big business and people hurting will pay gigantic interest rates or fees to have the honor of borrowing in advance against their future paycheck.
Most banks have a version of an 'advanced deposit' of funds not yet in your account. Once your paycheck is deposited, the bank takes back the money and the fees incurred for the service. Banks will allow you to have these advance deposits for a long time until they decide you abuse this privilege when they will promptly limit your cash advance abilities. Eventually, the bank will no longer allow you to take cash advances even though they earned money on you loan and you promptly paid it back.
The banks seem to charge the fees to the people who it hurts most. Obviously, if somebody needs to take a loan against their paycheck, they must be having some financial difficulties. The bank will charge a fee for borrowing, a fee if a check bounces and more fees when your balance is below zero. Because of these excessive fees, more checks will bounce and more fees will be charged to you. The banks have no consideration to the customer no matter how long you've banked with the company or what your personal situation might be.
loans are mostly for people with poor credit and no access to credit cards. Your credit score determines your borrowing abilities and if you've ever defaulted on a loan or made a late payment, your credit score declines so obtaining a line of credit might be close to impossible without enormous interest rates and high fees upfront.
Once a person has poor credit and no credit cards, loans are their only alternative to get groceries or put gas in their tank. The pay! day loan places will happily take a check and will not care if you have poor credit. They verify that you are gainfully employed and require that you show a recent bank statement and paycheck stub. They charge huge fees but will give you the cash you need for your everyday expenses.
This method of making ends meet is futile. Once your paycheck arrives and you pay back the bank loan and the payday loan establishment, you are once again left with minimal funds to purchase your daily expenses or pay your rent or mortgage. It's a viscous circle and the only winners are the companies that are lending you the money.
Unfortunately, with today's economy and the high cost-of-living, more and more working people need to take loans to make it until their next paycheck. Without some type of financial intervention, wage increase or personal loan from a family member, getting out of this cycle of borrowing is nearly impossible.
Once you realize that your paychecks are not covering your expenses and that your debt is only increasing, this is the time to reevaluate your living conditions and find a less expensive place to reside. This also might be motivation to seek additional employment, sell some expensive personal items and making intentional changes to remedy the problem of consistently needing payday loans.Using loans from your bank or from a payday loan business can be convenient and helpful in emergencies but if you find yourself having to use these services every paycheck, you need to reevaluate your spending habits and find some way to get yourself out of this viscous circle of borrowing and paying back.
About the Authoryou need to reevaluate your spending habits and find some way to get yourself out of this viscous circle of borrowing and paying back. For More Details Visit Us At: payday loans
If you have credit cards or unsecured loans in the UK it is likely that the agreement is unfair due to errors in the contract, if this is the case then you may not have to pay them back the money you owe, simply because you may not owe them a penny! See if you qualify by visiting www.killmybills.co.uk
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