by 
The Curious Bag
-
Payday loans are a quick and easy way to obtain cash to cover any expense. Most payday loan companies will lend anywhere from $50 to $1500 with merely a signature and a post-dated check from the borrower.
High Interest Rate
One of the major drawbacks of obtaining a payday loan is the interest rate. Payday loans are expensive, with companies charging as much as 400 percent or more in interest.
Short Term
Another drawback is that the length of time required for payback. These loans are designed to be paid back in full by your next payday. This usually means that the balance is due in full in two weeks or less.
Drawbacks
Payday loans can be renewed. In other words, the lender can pay the balance of the loan and then immediately reborrow. This can be a drawback for people in that it is easy to get caught in a cycle of only paying the interest and never paying off the loan.
Legal Rights
In most payday loan situations, the borrower is required to sign an arbitration agreement and give up his rights to sue the company in the event of a dispute.
Lender's Right
In the event the borrower does not bring the cash to pay a loan balance back, the lender has the right to deposit the check and remove the funds directly from the borrower's checking account.
Source:
RELATED QUESTIONS
Copyright 2023, Wired Ivy, LLC