Payday Loans Explained

Payday loans are a particular form of short term loans that offer the borrower a quick sum of cash as it is needed. Payday loans are not issued by a bank and are usually issued by small businesses called loan stores. Payday loans are named for the simple fact that borrowers would generally only take out the amount that was needed to financially sustain themselves until their next paycheck. Payday loan stores cause borrowers to become financially dependent upon these loans due to the short amount of time that the loan is required to be repaid while the interest rate that is placed on these loans is also enormous. Obviously, having to pay back a loan in only two weeks with an interest rate as high as 400% does not sound very appealing. Payday loans can quickly begin to add enormous financial stress on top of all the other monthly expenses that you already need to deal with.  Clearly, payday loans should be completely avoided in the first place and only resorted to if no other option is available.