Pay Day Lending
Is pay day borrowing smart? Absolutely not! The payday loan gets you out of temporary, current, financial trouble but brings more trouble. Just as a credit card does, the borrower is allowed to postpone a debt with a payday loan but for a shorter period of time.
A payday loan has very high interest rates and means you do not have the money to do responsible borrowing. Better to hold off on your purchase until you have the money available.
When you take a payday loan, you must give the loan company your bank account number (this means you are giving them access to your bank account) and credit card numbers which is very dangerous and financially stupid. Dangerous because you are now sharing your bank account with the loan company. What makes you think you won’t be struggling with the next payday or the one after that or the next one?
If you manage to avoid paying the loan off on time, your credit rating is affected and the late fees and finance charges will be overbearing. The loan company will harrass you until you break down and pay them or, maybe, commit suicide from their pressure and, then, they will go after your estate or relatives.
The payday lender reminds me of a shark just waiting for the opportunity to strike its prey. This is where the term, “Loan Shark” was borne. Lots of people have been conned into this scheme and when you are down and out financially, you are most vulnerable. A payday loan is usually used for impulse buying because it is so quick and easy to obtain.
If the lender files a legal claim against you, you will need to arrange time off from your job (and maybe lose pay from your employer) to appear in court. You could be required to appear in court many times, another hassle.
If you would not stand in the path of a train, then do not borrow from a pay day lending company!
Buying Your First House Bulletin Board
© Norine Peardon, May, 2009
