Escape The Payday Loan Runaround With A Better Short-Term Loan
Payday loans are designed to help people who need a small amount of cash ahead of their next paycheck. For a minimal amount of paperwork, and relatively few acceptance requirements, a loan recipient can get a fast loan on the promise of paying the loan back as soon as she receives her next paycheck. Short-term payday loans can help people meet bills and other obligations on time, but the extremely short borrowing period of these loans can be a serious drawback, and can lead to financial trouble, if not planned properly.
The Main Problem
The extremely short term of payday loans can make repayment a serious challenge, especially for individuals who take out large loans. Many payday loan agencies will allow a person to borrow up to half of her paycheck. Unless the borrower receives extra money from a different source before that paycheck comes, 50 percent of the paycheck will immediately disappear to pay off the loan, plus more to pay off the interest accrued.
For someone who relies on using all of her paycheck to get from one pay period to the next, suddenly losing half of her income is a serious problem. Because of this, some people are forced to take out another payday loan to cover this new gap. This can start a terrible cycle of debt, because it’s hard to get enough extra income to ever pay off the loans completely.
Longer Repayment Periods Are A Better Choice
Short term loans offered with longer repayment periods can make a big difference. If a loan can be paid back in smaller increments over a longer period of time, individuals have a much better chance to fulfill all of their obligations without needing to borrow any more money.
As we touched on before, with an ordinary payday loan, a person who borrows 50 percent of the amount of her paycheck must use 50 percent of her next paycheck to pay off the loan. However, if given a longer repayment period, the full amount can be spread over several paychecks by paying back a smaller chunk of the loan from each paycheck. Many people can temporarily tighten their budgets for two or three months, freeing up a small percentage of their income to gradually pay off the debt.
Short-term loans on longer repayment periods are a much better choice for many people than ordinary payday loans. We offer loans with a three-month repayment period. If you need a loan, contact us for more information or to apply today.