Tuesday, September 8, 2009

Problems caused by Payday Loans

Payday loans are one of the most expensive short term payday cash advance. The money you borrow has to be repaid in full before or on the next payday.

As originally claimed by the industry, the payday loans have now become a trap and are not used on a one-time basis. It becomes difficult to repay the loans due to its high rates that make the borrowers in desperate debt. They keep on extending the loan again and again by paying penalty fee. This kind of loan puts the borrower in worse financial shape.

If considered in California, the payday lenders are virtually unregulated as compared with other states. Even the consumers are easily deceived by payday loans. The consumers are openly harassed by illegal threats or collection practices. So many payday lenders deposit the post dated check of the consumer before the agreed upon date. This causes the check to bounce imposing more fees on the consumers.