Loan

Avoiding Holiday Payday Loans

It is quickly approaching that time of year and it is really important that we stress why people should be avoiding holiday payday loans.

So many people come up short this time of year and with all the ads offering money deposited directly into your bank account in a days time and sometimes within hours it makes it very easy to destroy your financial situation in no time at all.

There are things you can do to avoid this problem and we want to make sure you are informed BEFORE you decide to take out one of these loans.

If you have never taken one of these loans out or if you have and have gotten in trouble in the past with payday loans please read on and learn all the facts before diving in!

The Facts

There are major differences between regular payday loans that you take out in person and online loans you take out on a computer.

The computer loans, also called online loans are much more dangerous for many reasons and a borrower needs to understand how they work before they take one out.

When you take out one of these you will be billed THE INTEREST AMOUNT ONLY every payday cycle unless you call them 3 days before the due date and tell them a different payback amount.

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So, on a $500.00 two week loan the interest is $150.00 giving you a total payback amount on your next payday of $650.00 right?

WRONG!

The online companies will take out the $150.00 and recharge your loan another $150.00 for the next pay cycle.

You now have a new loan payback total of $650.00 after just paying $150.00 interest. See how quickly you can get buried?

States That Ban Online Payday Loans

The following states have completely banned online payday loans:

  • Arkansas
  • Arizona
  • Connecticut
  • Georgia
  • Maryland
  • Massachusetts
  • New Jersey
  • New York
  • Pennsylvania
  • North Carolina
  • Vermont
  • West Virginia

You can still take out an online loan in these states as the loan companies do ignore the laws and do not care about getting caught.

They are mostly based outside the USA and they will write the loans regardless of the laws and their collections practices are brutal!

They have been known to hit your bank account every payday cycle and in states where they are illegal they even change the company name to get at your bank account.

They will call everyone and anyone you know looking for money and they never give up.

Using Online Loans Safely

Sometimes people need to do what they have to do and when that happens these loans are an option.

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There is good news here and everyone can use that!

You can use online payday loans safely but only if you FOLLOW a couple simple rules to the letter.

  1. NEVER extend your loan
  2. On the first due date of the loan, call the company within 3 days of the due date and tell them you want to pay off the loan IN FULL

Follow these two rules and you will end up paying an extremely high interest rate for a two-week loan but that is all it will cost you and it will be done and over with.

Summary

Holiday season is on us and many times money ends up running out before paydays.

Anyone can use a payday loan be it online or in person safely if they follow the two rules above and do not deviate from them whatsoever!

Good luck this holiday season and know that if you or any of your family or friends do end up in trouble with out of control payday loan debt we will be here and we can help you!

The quicker you take action the more you will save in the end!