Everything You’ve Ever Wanted to Know About The Pros And Cons Of Payday Loans

During the current economic climate taking out any loan may fill you with a sense of dread, especially when jobs and cash flow are far from being easy during the Coronavirus Pandemic

Loan
The Payday loan is typically paid directly into your bank account. Unsplash

When you’re trying to stretch your finances and budget to the next payday, it may be too challenging for you. However, you could consider it’s a short term option and Use B3 Cash Solutions to help you add a little cash to your wallet and alleviate the financial stress and uncertainty at this time may be a short term answer.

One of the main benefits of a payday loan is that it prevents you from building lots of long-term debt, and reduces any risks if you lose your job somewhere down the line, or the potential of having either your vehicle or real estate repossessed. 

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What is a Payday Loan?

A Payday loan is a short-term loan initially designed to help you until the next payday. Before you decide to take out a Payday loan, make sure your look at all of your options and shop around. 

The Payday loan is typically paid directly into your bank account. As the lender, you will be expected to pay the amount back with interest in full when you receive your next paycheck. 

Ensure you know what will happen if you cannot pay the loan back within the scheduled time. You should also be aware that charges will be added, along with any additional interest. 

If your circumstances change and you cannot afford to make the payment, you should cancel. You should instruct your bank or card provider to stop any further payments being taken at least a day before the payment is due to leave your account. 

However, in some circumstances, the Payday loan lender may be willing to extend the terms for a longer period. 

Loans
When you’re trying to stretch your finances and budget to the next payday, it may be too challenging for you. Unsplash

The Effects of the Coronavirus Pandemic on Payday Loans 

During the current economic climate taking out any loan may fill you with a sense of dread, especially when jobs and cash flow are far from being easy during the Coronavirus Pandemic. 

Many Payday loan companies are starting to put an end to payment holidays put in place at the beginning of the Coronavirus pandemic, which means that lenders will be expecting that Payday loans are paid back as soon as possible. 

In July 2020, the Consumer Financial Protection Bureau (CFPB) issued a Final Rule concerning small-dollar lending or Payday loans.

However, the rule was blocked by Donald Trump. The rule was then allowed to be released by the CFPB under new leadership, and the rule is now in the public domain, meaning that lenders no longer have to check if borrowers can afford to repay the loan.

It is now feared that millions of Americans are left wide open to unaffordable loans and mounting levels of debt. 

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What this will mean for lenders or borrowers is uncertain, especially amid the Coronavirus Pandemic.

It Is now hoped that US President Joe Biden will rectify the financial picture of millions of Americans, and transform the lives of those affected by mounting long-term debt.

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