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Payday Loans Pros And Cons

885 Words4 Pages

Payday Loans Elizabeth Finsand Connors State College

Payday loans are marketed as simple, easy, and for emergency use. According to The Pew Charitable Trusts (2013) “Twelve million Americans use payday loans”, but as pointed out in Servon (2017) only sixteen percent use the loans to cover unexpected expenses. ( p.88) The numerous persons who use payday loans all have the same goal in mind. The goal is to …show more content…

For many striving Americans, payday loans seem like the only way to go, but weighing the pro’s and cons and knowing how the fees play a part in the loan is very important. According to PR Newswire (2016), twenty-four percent of students do not see payday loans as debt, this is alarming, considering the debt that is carried due to the apr and especially the fees. A study done by The Pew Charitable Trusts (2013) found that when a borrower is unable to pay off the loan within the time allowed, the borrower renews the loan and ends up paying more in fees, than the original loan amount. As a result of not being able to pay the loan off on time, the loan holder is now stuck in a debt cycle. Rather than the loan being carried for a couple of weeks, it is now carried for months. Planning ahead and carefully taking into account the fees, as well as the duration of the loan, is imperative in determining whether or not one can effectively take on a …show more content…

Making it a point to know all the particulars of a payday loan will help one to make a more sound choice when it comes to quick loans. The choices that are made need to be based on facts, rather than the, “I need it now”, mentality. Becoming more aware and more informed on the laws, rates, fees, as well as the various time lengths on payday loans, will guide one in making the right decisions concerning their finances. The high amount of payday loans, “Twelve million”, to be exact (Pew, 2013) gives one insight into the mass economic needs or lack thereof of the American people. Payday loans are not only a central issue, but are in fact global as well, which is why every individual needs to be educated on the

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