As it gets harder to make a paycheck last from one to the next, we are often tempted to utilize fast cash or payday loans to help make ends meet.? Though they are usually marketed as emergency loans, a Pew Charitable Trusts? Safe Small-Dollar Loans Research Project finds that most borrowers use the fast cash loans for everyday living expenses instead of for real emergencies.
The Pew study also finds that the majority of users take out a $375 loan and tend to renew the loan up to eight times instead of paying it off.? A borrower who does this would pay around $520 in fees for this loan, making his total payback $895.
The study says ?Millions have turned to payday lenders when finances are tight, finding fast relief but struggling for months to repay loans.? In fact, 69 percent of payday loan borrowers use the loans not for emergencies but for recurring expenses like mortgage payments, utilities or groceries.
Payday loan supports say that the fast cash is ?a vital way to help underserved people solve temporary cash-flow problems,? however; consumer groups continue to urge regulators to put a stop to payday lending, CNN Money reports.
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