What’s your favorite day of the week? Is it Thursday? Friday? You can’t pick Saturday and Sunday. That’s the weekend, and it doesn’t count (unless you work weekends). Does your favorite day come every week or every other week? For most of us, our favorite day of the work week is payday. Let’s face it. It’s what keeps us clocking in every day. But for those with too much money tied up in payday loans, pay day isn’t much different than any other work day. In a lot of ways, it may be worse.
Most payday loan places are happy to lend you up to 60% of your average take home pay. In many states, you can take out two or even more payday loans (generally from different places). It doesn’t take an economics professor to figure out that borrowing more than 100% of your take home pay, when you have to pay it all back, with interest, on the day you get your check, is a very bad idea.
Of course, when you need to pay more than you’re bringing in, your only option is to pay off the interest and borrow the money again (called re loaning). The problem is, you end up paying 10%-14% interest every single week until it’s paid off. And, as long as you have more than one payday loan out there, it’s awfully tough to pay them off.
I don’t want to paint a doom and gloom scenario. The truth is that you can get out of the mess even if you’re up to your eyeballs. Here’s what you do:
Once your payday loans are all paid off, you can take a deep breath and relax. Celebrate. Maybe even buy something nice. Just make sure it’s not so big that you need to take out an advance to get it.…Read More