Before taking any kind of loan, the
borrower should be aware of all the ramifications of borrowing money. Consider
all alternatives before taking a pay day or cash advance loan. Entering into
such an agreement should not be taken lightly. Risks regarding not paying back
pay day or cash advance loans can vary widely from state to state, but none of
them are in the least bit pleasant.
Paperwork Is Important
Should you decide to take a pay day
or cash advance loan, keep all the paperwork originating from any phase of the
process in a safe place. If you misplace the paperwork giving you the vitals on
the lender and your obligations, you could miss your repayment dates or the
address for remittance. That will lead you down a very dark path. You will also
need those papers should you feel the need to dispute fees or have other
complaints against the lender.
Consequences of Default
Not paying back your loan can lead
to increases in your financial liability. If you do miss installment payments
or do not fulfill your obligation, you are going to be in a big mess that only
you and an attorney can set straight. And that means a lot more expense.
Bankruptcy may become your only option. If you are on a payment plan, try to
pay back more than is due each time you make a payment. This will help you get
the loan off your back sooner and possibly lower your interest fees. Just
remember that the longer you hold the loan, the higher the interest rates and
other fees will become.
Regulations or Lack Thereof
Some states have many restrictions
on pay day or cash advance lenders, especially regarding interest rates
allowed. Some state have none or little. Florida allows its payday and cash
advance lenders to do pretty much as they please. Interest at times can be in
excess of 300% in some unique situations. If your rates are at a place you can
live with, that is a good thing. Some folks who have access to credit cards,
can experience up to 1,000% interest on cash advances. So, if the rates, while
high, are doable for you, a pay day or cash advance loan can be helpful. You are
paying interest to settle some financial problems and to get peace of mind.
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