12 Apr The dirty truth behind payday lenders
Essentially, these businesses can provide you with fast cash, but you’ll pay it back at an exorbitant interest rate. For the majority of the population, this is not the best way to get money.
Worse still, any loan or enquiry you make with a payday lender will end up on your credit file, which doesn’t look good for future loan applications. Some lenders will go so far as to automatically decline a loan application if they see a payday loan or enquiry on that person’s credit file.
Here are some other reasons to steer clear of payday lenders:
- Very high costs – Fees on these loans are very high (20% of the borrowed amount plus 4% per month), which translates into very high interest rates. Payday lenders are not legally required to tell you the annualised interest rate.
- High default fees – If you default (you fail to pay back the loan on the due date) you’ll usually be charged default fees that are added to your debt. The amount that can be charged in default fees is up to twice the amount you borrowed. You are severely penalised for missed payments.
- They make it enticing – Many payday lenders use attractive advertising to convince you that they have the perfect solution to your problems.
If you’re ever in need of quick money, please call us. We know the right lenders and products that will take care of your short-term needs, so you can look after your long-term goals.