Why Is the Interest of Payday Loans High?

Why Is the Interest of Payday Loans High?

Payday loans are short term loans, usually ranges from 1 to 30 days. Most of the time, it is being used to bridge the gap between the pay days when unforeseen events happen. It can be unexpected high bill, busted car, medical emergencies, or simply to avoid paying overdraft fees. When the need is there, this is a quick solution that most people use. The interest is huge, it can range from $15.00 to $75.00 depending on the arrangement and the amount you wish to loan. Below are their requirements:

18 years old and above

Latest Pay Stub

Checking account details

Personal Identification like SSN, Driver's license etc.

Lots of people are questioning this, so, I'm thinking, why is this so exorbitant?

Financial Institutions are those who provide consumers long term loan arrangement that range from months to years. It is being used by people who wish to make difference in their lives. When they want to put up a business, house improvement or even just when they want to see cash on their hands. Listed below are some of their requirements:

Social Security Number

Current mortgage payment / rent

Annual Income

Work related information like the company name and address

Collateral

VIN the year and make and model

This is another good option for us.

Before, consumers are using post dated checks when applying for a loan. Now, it's different. Almost everything can be done online. Online, you can browse to hundreds of payday loans or financial institutions you wish to have a loan. This includes the payments and other transactions.

You might be thinking, why did I bring this up? Why did I show the difference between the two? While critics of payday loan shows us how awful it is, they are forgetting the fact that not all people have access to Prime Credit. This leads people to turn to payday loan- this can be the reason why it is so exorbitant even though lots of articles/ blogs are picking on them.

This type of transaction is a high risk. Just imagine the high number of people who don't pay back on time or at all. This is to avoid large monetary losses which is understandable.

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