Debunking Myths About Payday Loans
A payday loan refers to a debt which is taken for dealing with the unexpected expenses that arrive before your payday. The term “payday” is used to define this type of loan because it is to be repaid per payday. For instance, if you live from pay check to pay check and do not have huge savings. You will usually allocate your previous payment for the bills, taxes, food, and some for yourself. But, if you get in a car crash, you probably won’t have that type of money to pay for the car repairs and hospital bills. That is where the payday loan comes in. You will take a payday loan and repay a certain percentage of it each payday until it is off your shoulders.
The payday loans were introduced to help the people pay their bills and other emergency expenses on time without over drafting their bank accounts. Payday loans are only reserved for emergencies that can have severe consequences like, paying bills, or your rent etc.
Sadly, over the past years payday loans have earned quite a reputation due to certain myths, rumours and minimal bad experiences. In this post, we are going to debunk these myths so that you can go and benefit from these payday loans.
Myths about Payday Loans and the truth behind them:
Myth No.1: Payday loans are hard to pay back
One of the main myths about payday loans is that they are hard to pay back. This is obviously not true since they can be paid in instalments. When you go to get a payday loan, the representatives of the lenders guide you throughout the process. They also make sure that you know that the loan can be repaid in a number of different ways. These ways are there to make sure that the repayment of the loan is easily manageable by the customer.
Myth No.2: Lenders pressure or trick you into taking multiple payday loans
Another myth that surrounds the concept of payday loans is that the lenders force or trick you into taking multiple loans. The reason behind this is that they have a certain percentage of commission for every loan. Yes, they do have commissions but, the amount is so little that it rarely works as a motivation for them to trick customers. It is evident that even after being provided with multiple manageable ways to repay the loan, you are not able to repay, they will suggest you take another loan. At the end of the day, the lenders want their money back.
Myth No.3: There are hidden charges attached to the payday loan
The third myth is that there are hidden charges that you do not get to know about until it is too late. That is entirely false because payday loan lenders and companies are legally obliged to be transparent with their customers. As mentioned earlier, the representatives of the lending company assist you throughout the process and make sure that you read the entire document. If you find yourself having to pay any charges that you were not aware of, then you probably missed it. A lending company, specifically those who deal with payday loans can be taken to court for hiding anything from their customers.
Myth No.4: Payday loans are only granted to people with low income
Payday loans are not reserved for poor people only. The objective of payday loans is to get rid of emergency expenses so that you do not have to face severe consequences. These loans can be granted to well-off people with high paying jobs when they are faced with expensive emergencies. The ideal candidate of payday loans are people with bad bank credit. But, it does not mean that it will aid well-off people in case of emergency. You are eligible for a payday loan if you need quick money and are not able to afford it at the moment.
Myth No.5: The interest rates of payday loans are too high
If you research, then you will find out that the interest rates of payday loans are exceptionally lower than other traditional loans. The reason behind this is that the payday loans are short-term loans; hence, it psychologically feels as if the interest rates are too high. However, you can always find a lender with lesser interest rates as compared to the others in the market.
Hopefully, we have solved your misconceptions about payday loans. You need to realize that payday loans are not evil but, they are a quick solution to save you from the evil. They are perfect if you are stuck in bills and other emergency expenses. They also don’t drag with you throughout your life because they can be easily repaid on your next payday.