Are Payday Loans Bad?
Although it goes against what a lot of debt advice companies want you to believe, payday loans have their uses. If an emergency comes up and you need some money quickly and as long as you can pay it all back in the agreed time then a payday loan can be great. However the problems begin if you take out a loan and you can’t pay it back. This is where the infamous APR comes in. With APRs of well above 1,000%, as well as fees and charges, not paying back your payday can quickly become an expensive loan. And this leads many people into believing they can ‘trick the system’ by taking out another payday loan in order to repay the first…
‘Spiral of Debt’
This is how people enter the ‘spiral of debt’. This is when people get aloan in order to repay another loan, and then they get a loan to pay off that loan, and then again, and again, and again…
And, to be fair, this method works – until it doesn’t. And then it really hits home exactly how much debt you are in. You suddenly realise that you have all of the fees, charges and interest of all of your loans to repay. Prior to agreeing the loan, many payday lenders will ask you to set up a ‘continuous payment authority’ (CPA), which will allow them to automatically take any money from your bank account. Although you can cancel the CPA at any time, you will obviously still owe the money to the payday lender.
Why Do People Use Payday Loans?
As a sweeping overview, people use payday loans as it’s a quick and easy way to get money when you need/want it. In recent years many payday loan companies have made their application criteria stricter, but it’s still easier than going to the bank to ask for for a loan – but at least they’re not just giving them to anyone now. However, things happen and you may not be able to repay your payday loan.
I Can’t Repay My Payday Loans
If you can’t repay your payday loans, don’t worry. We can help. Do not even consider taking out another loan to repay your first. Simply complete this quick form and one of our experts will call you back, alternatively you can call us directly on 0800 029 3992, and please don’t worry, our advisers are very experienced, they have heard everything before and are completely sympathetic to your situation. So don’t hesitate and contact us now!
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