why we don’t like ez payday loans
There are many reasons why we don’t like ez payday loans. Let’s take a look at a couple
I often wonder how payday loan companies decide where to open branch locations. Within a 15 mile radius there are relatively wealthy areas, economically depressed areas, and good ol’ middle class suburban zones. If I put a map on a table in a local restaurant and ask them to point to the areas where payday loan branches are located, where do you think they would point?
It’s no secret that companies that work with ez payday loans target those in a state of financial emergency. I’m not going to take a political stance regarding the morality of this practice but I thought I would provide 4 reasons why one should stay away from these companies:
1.) The interest rate is 400% to 700% annually. It makes your credit card interest rate of 20% look great, doesn’t it?
2.) You have to turn over a postdated check. What if they deposit it early?
3.) Early deposit causes fees to compound and harassing phone calls from collections agents
4.) The large fees cause a reliance on these companies because customers can’t pay off the fees causing the loan to be rolled over again.
A lot of articles that I read about this subject say the same thing: Change your financial situation, develop an emergency fund, live within your means, blah, blah, blah. This sounds like great advice but why would somebody, by choice, look at ez payday loans under these conditions? They aren’t doing it by choice. They do it because they have no choice so how about we look at what somebody can do who is in this situation. First, talk to the people who hold your loans. They would much rather negotiate new terms rather than you not pay. Work to get your payments lowered and understand that you are going to have to go in to some degree of higher discomfort to trim your expenses.
Let’s be honest, the normal advice given isn’t overly practical but there are expenses in your life that are more a want than a need and those are going to have to go or you will stay in debt.
What other ways can you avoid ez payday loans? Drop me a comment and let me know.
Budgeting and financial planning are the best ways to avoid using an wanted credit, but there are always times when it just happens. Personally, I’ve used payday loans they helped me out, and were a much better option for me at the time than a long term traditional loan, which is secured against good or a car. I only needed a small amount to get me by until my next paycheck and I didn’t have any cash available on a credit card, not to mention that would have cost me more than the payday loan did, and it was easy and helpful. However, I’ve done much better with budgeting and saving now so that I don’t have to use unwanted credit.