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Say NO To Payday Loans

Say No To Payday Loans

Most of us have probably heard of payday loans, hopefully we have all avoided them. If you haven't, by the time you finish reading this article, we hope that you will never use these "services" again. The typical payday loan business (some examples are "Money Mart", "Cash Money", "Money Tree" or "The Cash Store") operate in high traffic areas, often in strip malls and have a small store front. These places look harmless enough, often they state you can borrows a fixed amount of money for a small fee ("Borrow $300 for only $20"). Unfortunately this does not take into account all of the other possible fee's involved.

Payday loans have the highest fees of any type of loan or other form of borrowing. Each country and state have their own laws on the highest fee that a business can charge, and almost in every case a payday loan will be the maximum fee that they can legally charge. Keep in mind, this is a fee, not interest!

On top of these fees, these companies also charge insane interest rates. Again these rates can be ridiculously high.

Some authorities estimate that after all fees, interest, etc the borrower ends up being charged well over 500% in fees and interest.

Unfortunately these businesses pray on people who are already under financial distress, often the people who seek these types of loans are desperate and already ready to do almost anything to get this money to pay their bills. Also, once someone initially seeks out a payday loan, it often becomes a disastrous cycle. It then can become a habit where every week or every other week a new payday loan is secured and the borrower can spent hundreds, possibly thousands of dollars in interest and fees.

The moral of the story is avoid these under all circumstances, if you currently have one, pay it off ASAP!

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