Payday Loan Lowdown

Kansas is witnessing a payday poplosion — these centers are popping up all over the place and the authorities seem to be having their hands full with them. And one of the most immediate consequences of this sudden rise is the steep hike in the number of people who are facing financial problems thanks to payday loans. That’s because the loans have high interest rates, which makes it tough, sometimes impossible, for borrowers to fully replay the loan when it’s due.

However, people working in the payday loan industry don’t see it as an evil that needs to be eradicated. They say that these loans are most often used by people with legitimate emergencies, like needed medicine for a sick child or necessary car repairs. They claim that taking a payday loan is better than the only other alternative available to people — writing a bad check. This would mean facing an even more severe penalty from their bank. 49abcnews.com reports:

But over at Consumer Credit, the counselors hold out hope that people will educate themselves on the perils of payday loans and have a back up plan for those last minute money emergencies.

Read more: Benefits, consequences associated with payday loans

Her name could have been anything — Jane or Jennifer, but her story has a resonance and bears similarity to many other stories that are being repeated across the nation. She is a woman who only wants to do her day job, pay her bills and bring up her family. As the needs of her family increase, so do the expenses and that’s when the problem arises. It’s when you are in such a vulnerable situation, that you see a sign that you feel is your salvation. Only problem is that this sign, which says ‘easy money’, may just lead you into a debt trap from which you may find no escape.

Easy money or fast cash are the synonyms associated with payday loans. Of course, on that one count, the industry is quite truthful. You get the money fast and easy. However, it is only once you’ve taken the loan that your problems actually begin. Most lenders allow you to stretch the loan payback date — and usually, most people require this extended time. The company allows you to extend time for only one purpose though — it can then charge you exorbitant interest rates and you will not know what hit you.