A fast cash online payday loan may seem like a quick answer to your financial hardship, but don’t be fooled. It will get you stuck in a downward economic spiral. I will show you three reasons why a fast cash online payday loan is a debt trap.
Online payday loans are particularly dangerous to consumers because they are so easy to obtain. You don’t have to drive anywhere; you apply online, then have the money deposited into your bank account. But, all isn’t right. You haven’t solved your problem; you’ve simply put it off for another week or two.
A Cash Online Payday Loan Should Always Be A Temporary Solution
When you have unpaid bills and not enough funds, it’s easy to panic, especially if it’s a critical bill. What happens if your rent is due and you can’t come up with it? Facing the possibility of eviction, it’s perfectly understandable that you’ll panic. The problem here is that when you panic, you don’t make sound decisions. You turn to any solution you can find to help you come up with the money you need. For many people, that solution means converting to online payday loans.
While a payday loan may help you cover your bills today, it’ll merely transfer your hardship to a future date. When you get your next paycheck, you’ll have to pay back the loan amount plus a high amount of interest.
Then, you find yourself short the money you need to cover your bills again. So, what do you do? Well, most people turn around and get another fast cash online payday loan. Then the next time they get paid and have to pay the loan back, they take out a loan again. It’s a habit that can develop into a never-ending cycle of using payday loans to make ends meet. It traps people in a state where they can never get ahead and pay off their initial investment.
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What are Other loan options available?
If you find yourself in a financial bind, there is hope. There is a way out, a way to break the cycle so that you can become more financially stable. The first thing you need to do is get rid of the payday loan. Now, you can’t simply stop paying it because there will be ramifications for taking that kind of action. Instead, you should turn to a longer-term loan with lower interest. A solution that will allow you to pay off your online payday loan as well as all your unpaid bills.
An exciting option you can use to get rid of all your payday loans is LoanConnect. They’re a Canadian financial institution that doesn’t solely rely on your credit score to offer you a loan. Even if your credit score is sub-par, but you have regular employment income and have been employed for at least six months, there’s a real chance you can get approved for a low rate loan. As their website says, they provide more jumbo loans, for more extended periods, at lower interest rates.
The main problem with a payday loan is the fact that you have to pay off the entire balance on payday. That leaves a void in your income that is virtually impossible to overcome. On the other hand, if you approach a bank about a debt consolidation loan, your payments will be much lower. The fees and interest rates much lower.
An Online Payday Loan Will Never Resolve The Underlying Problem
The chances are that if you end up needing a payday loan, it’s due to not having your finances under control. You’ve probably spent and borrowed more than you can afford, and now you are having trouble paying everything off. If you’re having financial difficulties, a company that specializes in debt consolidation can be beneficial. Rather than being forced to file for bankruptcy, debt consolidation lets you pay off what you owe by consolidating your monthly bills into a single, more affordable monthly payment.
Use Secured Credit Cards As A Safety Net
If you were having financial trouble, there’s a good chance that credit cards were one of the main contributing factors. Credit cards can be a great tool, but only if you can use them responsibly. To be able to get a debt consolidation loan means that there’s a probable chance that your credit took a hit due to late payments. With a secured credit card, you need to put down a deposit that will serve as a guarantee if you’re unable to make your payments on time. A solution that gives you the helpful financial safety net of a credit card without the risk of your debt spiralling out of control again.
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