Summary:
An article looking at both sides of the payday loan article. It does, however, swing towards the side of using caution if you choose to take out a payday loan.

Details or Sample:
Payday Loans - A Double Edged Sword?
By Matt Jackson

Controversial Financial Products.

Every few years a new financial product hits the marketplace and causes a stir between all parties. Credit cards are an accepted addition to modern life now, and it´s not unusual to see a wallet with two or three of them bursting out of the card holder but when they were first introduced and for some time after there was still controversy surrounding its release. The arguments for the use of credit cards were essentially that they allowed people to make purchases and repay the money in the future. The arguments against credit cards were that the interest rates were too high and they would encourage people to get into debt.

The Close Scrutiny Of Credit Cards.

It is not long since payday loans were first introduced and they came under almost identical scrutiny to credit cards. There is no avoiding the fact that the rates are comparatively high, even when compared to those of the credit card, but so do the people who use them as well. Strictly speaking, the charges associated with these two forms of credit are different but fundamentally they can be easily compared to one another.

How Much Does A Payday Loan Cost?

While credit cards attract an annual interest rate of approximately 12%, you are looking at rates a lot higher with payday loans. These rates vary from $10 to $20 for every $100 you borrow usually over a period of two weeks. You are also offered the opportunity to roll the loan over for another period. Of course, you will be charged the same rate as for your initial loan and by rolling a payday loan over too often you will very soon be paying huge rates. Consider that you borrow $1000 and roll the repayment over 5 times. This is not unusual and it means that even at the lowest rate of $10 for every $100 you will have paid a staggering $500 and you will still owe the initial $1000. That´s the equivalent of a 200% APR.

Purchase this content for your website...

Pricing:
Usage:	$25	[Add to Cart]
Unique:	$60	[Add to Cart]
Full Rights:	$70	[Add to Cart]

Downloads: 0
Written by: mattsterrr
Available File Types:Text
Words: 750