Imagine if I told you that you’re going to pay 400% on that loan or that none of the payments you’re making are actually going to reduce what you owe. Well, it’s true. When you need money, man, the sharks are out Payday Loans, Title Loans, Check Cashing, Rent-to-own, Refund Anticipation Loans, Buy Here and Pay Here . The list just keeps going. All of these services know that you don’t have any options. That means that they’re taking the risk and you’re definitely going to be paying for it.
Let me show you a small example. Assume Betty takes a $300 Payday loan for 10 days on October 1st. The fee is usually $15 for every $100 borrowed. That means she’s going to pay back $345 on October 10th That is 547% interest. That’s crazy but I know what you’re saying, you need to money right now. Life’s not always pretty. The commercials are pretty compelling too I get it What are your options.
- First, go to the Credit Union or a Community Bank. These banks are nonprofits that try to work with consumers in tough situations. Nothing’s guaranteed but it’s a good place to start and get some objective guidance.
- Secondly, take a look at benevolence funds or hardship funds from your employer. Many employers have these funds to help employees get through tough times. It’s simply another avenue to explore.
- Third, borrow from a friend. Now, I hate that advice because friendship and money rarely mix but if you’re going down the path of paying 500% interest, it may be worth a call to a close friend.
- Lastly, maybe you just avoid the cost altogether. If this is to eat or to make sure you’re not homeless, I get it. Go for it, fine. But if you’re about to rent a 50-inch flat screen TV I don’t get it.
I can’t judge your situation but you can Be honest with yourself. If you’re going down this route, be really careful and make sure you’re focusing on financial fuel so that you can get out of it as quickly as possible. Don’t let this be a deadly trap for something so trivial.