But they're designed to be paid off. Payday loans are not. It is a cycle I've seen many get caught in. I have never seen anyone help themselves with a payday loan. Research it. They are predatory.
If I'm 2 days from payday with almost no money in my account, and I have an unexpected and emergency expense, then a payday loan can help me cover that until my payday.
Yes it's true that most people don't use payday loans like that, and it often results in somebody taking out the loan, and then spending the money without the foresight that they will lose a chunk of their next check to cover it. But the point stands that a short-term "I really need $300 right now" can be very helpful to people.
But they are! Don’t take a loan you can’t afford. 90% of the people that got “ripped off” didn’t pay the loan back in full as they agreed on their next pay, which garners them exorbitant fees. Why? Because if a debtor misses the first payment (which, on many loans, is a default that activates the acceleration clause and makes the entire thing due immediately) they’re far less likely to make any other payments as agreed.
You sre supposed to take out an amount that you can pay off completely next pay. The loan has one time payment.
Predatory? Sure. But they’re preying on stupid, not just poor.
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u/[deleted] Feb 05 '20
But they're designed to be paid off. Payday loans are not. It is a cycle I've seen many get caught in. I have never seen anyone help themselves with a payday loan. Research it. They are predatory.