Disadvantages

best payday loans

Problems with payday loans

Getting approval for a payday loan is relatively easy and if you are having problems with paying the back the loan, your lender can decide to give you an offer of a loan payment holiday, which is known as repayment plan or a deferral. Loan payment holiday means paying more interest and possibly other fees. You might think that this is a great solution for your financial problems but you will only be able to manage these loans if you borrow them on a short term basis, i.e., not more than 30 days. In the long run, you will find yourself with unmanageable debts, which can seriously ruin your financial life.

A client might also consider applying for another payday loan from another company intending to use it for repaying his or her first one. This is a financial massacre and your debts will start growing very quickly. You will find yourself in a vicious cycle of debts that will be nearly impossible to get out of. Missing payments on your payday loans can also tarnish your credit rating in a serious way and this might also compromise your ability to borrow in the future.


Short payment period

They have short terms and must be paid back quickly, usually within 10-30 days. This can be a disadvantage where a client is not able to get the money within those days. One may be forced to take up another payday loan to pay the first one or charged a late payment fee.

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