Gathering Interest

Each year millions of Americans are taking out small loans at rates that can reach four hundred percent a year or more. You may compare these high rates to those of loan sharks, but in America, it is absolutely legal. As a matter of fact, these loans are part of a trend called payday lending or payday loans. Payday loan stores, now a forty billion dollar industry, are among the fastest growing financial services in America. Ten years ago they did not exist, now there are more than twenty two thousand payday loan stores in America. For those strapped for cash, a payday loan can be cheaper than other alternatives, though the FDIC says a customer should not continue a payday loans more than three months a year. This means no more than six loans. If one makes more than six loans a year, they might be directing their self to severe financial hardship in the future. People take out an average of six to seven loans a year. They are quick and easy to get. You don’t need credit. Usually, all you need is a job and a checking account.

However, be aware, that it would be in one’s best interest to use payday loan services as a temporary solution to financial hardships. Using these services for long periods of time only means you are gathering interest and falling deeper into financial hardship.