Payday Loans with Monthly Payments
How Payday Loans with Monthly Payments Will Affect Your Financial Health
Payday loans are advertised as the most easy and accessible form of loan for an emergency situation. Those advertisements make getting and repaying payday loans with monthly payments look like a piece of cake. Nothing could be further from the truth, as what those lenders don’t tell you is that payday loans with monthly payment plans are harmful to your overall financial health. Most people who take personal payday loans with monthly payments end up getting trapped in a vicious cycle of debt. Those loans are many times costlier than even the most expensive credit cards. Read on to know how payday loans with monthly repayments can completely derail your financial health.
Payday Loans are Unbelievably Expensive
All forms of quick loans are invariably expensive, but nothing compares to how expensive payday loans with a monthly payment plan are. The annual percentage rate for a typical payday loan is over 600%, while even the most expensive credit cards do not charge you over 40%. It is clear that payday loans with monthly payments are predatory in nature. Most people end up paying much more than they borrowed.
High Cost of Rolling Over the Loan
Very few people who take loans that you can payback monthly in the form of payday loans are actually able to repay it in the given time. They usually extend the loan. The cost of rolling over a loan is equal to the interest rate levied on the personal payday loans with monthly payments. For instance, if you have borrowed $100 at the rate of 17.50%, the rolling over would cost you 17.50% plus the principal amount and its interest. In effect, the overall cost of lending is exponentially higher than a credit card or traditional loan.
Taking payday loans with monthly payment plans is like willfully stepping into a trap of debt. The high APR and the additional cost of extending the loan makes it practically impossible for a customer to repay the principal amount plus the interest. On many occasions payday loans with monthly repayments are made by taking out yet another payment loan. This creates an endless cycle of debt, which becomes very difficult to get out of.
Payday Loans are too Fast
Normally, a fast loan would be considered a good thing. Who wouldn’t want to be provided with a much-needed loan as soon as possible; and payday loans online with monthly payments can be obtained sooner than most other types of loans. However, that is also its disadvantage. The sooner you get cash, the less you think about avoiding an avoidable expense. Some expenses are just unavoidable, such as a health issue or car repairs. Though, a lot of times payday loans with monthly payments are taken out for an expense that can easily be ignored.
What is the Solution?
Payday loans with a monthly payment plan are predatory and yet immensely popular. That makes one wonder why so many people knowingly get trapped in a cycle of debt. The answer lies in the fact that many people who take out these loans have nominal to zero savings. They live paycheck to paycheck and usually have a bad credit score. In the situations of urgent monetary requirement, payday loans appear to them as the most viable option. However, the Advance Financial Flex Loan is a solution that can get you out of the repeated financial distress caused by payday loans and their extremely high APR.
Advance Financial offers an open-ended line of credit wherein the repayment due dates are aligned with your payday. There is no possibility of the rolling over cost with a Flex Loan because Advance Financial lets you apply once for a maximum amount which is your credit limit. You can withdraw any amount within your credit limit, inside a given time frame. The interest will be levied on only the part of the credit limit that you have actually withdrawn. The overall cost of lending for flex loans is much lower than a typical payday loan. We, at Advance Financial advise you to borrow responsibly and pay a minimum amount on every payday to not fall into a debt trap.