Payday Loans Debt Consolidation

How To Avoid The Risks Associated With Cash Payday Loans?

It is true that cash payday loans have become very popular these days, but at the same time, it cannot also be ignored that these lending programs come with an array of risk factors. Therefore, you have to be very careful in your approach. Many states have now enacted specific laws in order to make sure lenders do not take undue advantage from the borrower by pushing them into a never-ending debt trap. You can visit the section “” to find out detailed information about the laws applicable in your state. Following is a brief rundown on how you can avoid the risks associated with these types of short-term cash advances.

Review The Rate Of Interest

Cash payday loans usually charge unusually a very high rate of interest that can go up to 300% per annum or even more. This is definitely something that seems unfair in the very first look. Luckily, there are some genuine lenders that allow you to borrow instant money at a reasonable rate. Some states have also put an upper ceiling for interest rates. For example, in Ohio, the rates cannot be higher than 28%. In Florida, it can be as high as only 10% per annum. Therefore, make sure that you are well aware of the laws applicable in your state.

Repayment Requirements

When you borrow cash payday loans, you need to sign an agreement. Make sure you read the terms and conditions mentioned in the contract thoroughly. If anything is not clear to you, get it clarified before it is too late. You should pay special attention to the repayment terms. As per the laws in many states, the repayment period should be at least 31 days, but the exact provisions vary from one state to another. Besides that, it is also important for you to keep in mind that automatic renewal or rollover of loan in case you fail to make the repayment in time is also prohibited in many states. Unscrupulous lenders may try to put you into a serious debt trap by automatically renewing the loans with additional interest and unusually high penalty charges. So, plan your in time else you may find yourself into a deep financial trouble.

The most important thing to keep in mind is that cash payday loans are advertised to help people who need instant money to meet an unexpected but temporary financial emergency. Therefore, make sure you use it accordingly. You do not want it to turn out to be another financial nightmare. Be very careful while you go for it.

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Posted in Managing Payday Debt, Payday Loans, Payday Loans Debt Consolidation, Risk Factors | 2 Comments »

2 Responses to “How To Avoid The Risks Associated With Cash Payday Loans?”

  1. Alisa says:

    Very authentic information must read all the terms and condition while applying for the same. Try to take cash pay day loan only in extreme emergency because the rate of interest is too high. If possible borrow the money from ur near and dear ones.

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