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Have Back to School Payday Loans Piled Up? We Can Show You How to Break Free

Have back to school pay day loans piled upSchool is officially back in session, and that means that the blitz that is back to school shopping is hopefully a distant memory – at least for another year! However, the new school clothes, the shoes, the supplies – these items all cost money, and if you were strapped for cash at the end of August, it may mean that back to school payday loans have piled up – and are soon going to be coming due.

Payday loans can be a financial killer. The fees and high rates for borrowing, coupled with the extremely short turnaround time, means that many individuals quickly get caught in a vicious cycle – one that can be tough to break out of.

Here is a perfect example. If $500 is borrowed and you have to pay back $605 on your next pay day, and you earn $800 bi-weekly, that means that you are only going to be left with $195 to pay bills and buy basic necessities for the next two months. This is a really tight squeeze and as a result you roll the loan over, with the intention of paying it off on the next pay day. In theory this works…if you can pay it off. If not, the fees really stack to pile up.

The cost of a $500 payday loan rolled over:

  • Rolled over twice (taken out for 1 month) at a 21% fee = $210 in interest for the month or an effective cost of borrowing of 42%.
  • Rolled over 13 times (taken out for 6 months) at a 21% fee = $1365 in interest for the 6 months or an effective cost of borrowing of 273%.
  • Rolled over 26 times (taken out for 1 year) at a 21% fee = $2730 in interest for the year or an effective cost of borrowing of 547.5%.

In the end, a $500 loan will effectively cost you over $3000. That is a lot of extra output for very little initial income.

If you’ve gotten in over your head with payday loans, and can’t seem to dig yourself out, don’t stress – do something about it.

Additionally – if you are considering a payday loan to help get through a rough patch, we hope we’ve convinced you that this option should be avoided at all costs. A personal loan from a reputable lender is a far better option.

Whether you want to finally get rid of that payday loan, or want to avoid them altogether, call Prudent Financial today – we offer loans to individuals with bruised credit – and can save you money while doing so. 1-888-852-7647.

 

 

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