Saturday, January 3, 2009

Online Pay day loan....a trap towards" Debt cycle."

The increasing demand for the pay day loan mostly among the young and the communities with low and moderate income is paving their way towards debt causing financial crisis and mental stress in their life.The urge for the short term loan is increasing day by day.According to (CFA) The consumer federation of America a tremendous growth is seen in the use of internet pay day loan in the recent years and they have warned to take extreme caution while using internet for borrowing pay day loan .The network of the payday loan companies are expanding day by day due to huge demand in the consumer credit people are ready to borrow money and they are ready to supply in the process the innocent consumers are converted into victims of debt.

There are lot of lenders in the market who are willing to give loan,they usually target young and poor people.we should be aware that we have to pay high rate of interest and also it has a risk factor,because when we are borrowing money or doing any transaction it involves electronic access to checking accounts and in the process we are exchanging some secret financial information through there is a lot of risk involved in it.

The (CFA) surveys says that the borrowers can have to pay (APRs) annual interest rate of 650% as because the borrower might have to pay a loan due amount of $30 per $100 on the next pay day which is a good amount,this is most affecting the poor people as they borrow money without being aware of the high interest rate and also they have to renew the loan for every two weeks before they pay off by their earnings and savings ,and it paves their way towards debt.

Try to avoid short term loan especially via internet as far as possible unless and until their is any urgency for borrowing money and even if you are borrowing money think whether you will be in the condition to pay the due loan amount with a huge rate of interest by the next payday.or you might be trapped into debt cycle.Be alert and enjoy a debt free life.

1 comment:

Oskar schiffer said...

Nice post and informative too...keep it up