Are Holiday Payday Loans Online Safe?

holiday payday loans onlineWith the holidays right around the corner comes the battle of keeping the budget from blowing up and we get the yearly question of are holiday payday loans online safe?

The answer is the same every year without change and it actually a two-part answer of yes and no!

I know that may sound a bit confusing but read on and we will explain what we are talking about by taking a look at the safety of online payday loans.

Help is now available for online payday loan debt! Everyone qualifies!

How do online payday loans work?

`The first thing you will need to know is how these loans work so let me walk you through the process.

Because almost anyone who has a job and a checking account will qualify for a loan regardless of their ability to pay them back you must be informed to avoid a dangerous financial situation.

Here is how they work:

  • You apply for the loan online and within minutes you will get a reply. Pretty much anyone with a checking account will qualify.
  • You turn over your bank account information so this company can make direct withdrawals from your checking or savings account and they will deposit the loan amount directly into your savings or checking account.
  • On your due date, the company will unless OTHERWISE directed by you in writing or by phone only take out the interest and counter-charges for the loan leaving a new set of counter and interest charges outstanding.

Example: You borrow $500.00 for two weeks with a counter fee of $15.00 and an interest fee of $150.00. Your loan balance on your due date will be $665.00

The automatic payment to the loan company that they will withdraw from your account will be $165.00, not the $665.00  you really owe unless you tell them you want to make a different payment amount and this must be done anytime prior to 3 days before the due date.

As soon as they withdraw the $165.00 they will add it right back in for the next two weeks and you will have a fresh loan due totaling $665.00

Is this what they call a payday loan trap?

payday loan trapYes, it is a form of the trap, and one easy to get caught up in.

Most people who use the online loan companies do not understand the differences between a brick and mortar company and one online.

The payday loan company down the street will do just the opposite when they collect on your due date.

They will collect the total loan payment on the first due date unless you tell them differently.

Can they be used safely?

These online loans can be used safely and can actually be a lifesaver in a case where you must have money today and have nowhere else to get it.

The biggest thing in avoiding the payday loan trap is you must make sure you can pay it back in full on the first due date and also made sure that is the amount they will be withdrawing.

What about extending the loan?

stretchIt is never a good idea to extend one of these loans because that is how they get you to keep forking over large amounts of interest, and this is where they really take advantage of people.

It is one thing to pay $165.00 to borrow $500.00 for two weeks but when you extend it you will now pay $330.00 to borrow that $500.00 See how fast it can add up?

How wise is it to use these companies for holiday money?

This is the real question and the answer is not wise at all. To borrow money at this cost for anything short of a life-threatening or job threatening issue is to be avoided in our eyes.

Borrowing money for gifts and such is never a good idea.

Not only are you paying an outrageous amount of interest for the money if you have to borrow it in the first place you really can not afford it at all.

I know how tempting it is to want to have a happy household during the holidays, but getting caught in a payday loan trap is not the gift you want to keep giving, and you will keep giving, over and over and over!

So there you have it!

I hope I have covered everything you wanted to know about holiday payday loans.

It can be a very long holiday season, especially if we have kids and are short on money.

I have found it is best in this situation to find things to do that are cost effective and that the whole family can participate in!

Now it is your turn!

fingerIf you have any questions or comments please leave them below in the comments section and I will address them promptly!

Happy Holidays!

Help is now available for online payday loan debt! Everyone qualifies!

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