There are all kinds of loans in the world for almost any kind of situation. I have seen student loans, commercial loans, private loans and more just in my lifetime! But there is one very special loan that I think needs to be mentioned by itself – the payday loan. With a payday loan, I can borrow a certain amount of money in order to pay for something I want now, whether it be a shopping spree or a bill, and pay it back with interest when my next paycheck comes in.
And sometimes you just can’t wait for your next paycheck to arrive – there’s a bill that needed to be paid yesterday, or your children are begging for pizza for dinner, or you found a collectible you need right now that you don’t have the money for yet. That’s where payday loans save the day, right?
The Reality Of Payday Loans
Well, that’s not quite so accurate when I stop to think about it. Payday loans might seem like a handy way to pay for something I need now and then pay off the money I borrowed later – much like a credit card, in fact. However, payday loans have a very high interest rate, usually over $50 to loan out a few hundred. This can cause major debt issues in the future.
Let’s set up a scenario – I need $400 right now to pay my rent. If I get a payday loan for $400, and it comes with a $50 interest fee, I now owe $450 on my next payday. A week after I take out this loan, I get paid $250, and put all of that toward my loan. I now only owe $200. But wait! I just had my light bill come up for $150 and I have no money once again. Here, I can branch off – either get another payday loan with high interest that I will have to pay off, or leave my light bill unpaid and have my lights turned off and my credit go bad.
Neither of those options are good, are they? Either way, I am still in debt and need to pay off my first payday loan. Even taking out one payday loan puts me in debt and jeopardizes my financial future, but taking out more as I fall further behind on payments and accumulate more debt only makes it worse. Knowing that, it may be a better idea for me to use my credit card after all! Or, if my credit card is maxed out, I may just have to bite the bullet and let something go unpaid for a day or a week until my payday actually comes.
This is how payday loans cause debt across Winnipeg, Canada and all over the world. Like the above scenario, one payday loan can lead to a domino effect of increased debt and loans that can ruin a person’s life.
Payday Loans In Winnipeg
Many people find it hard to resist, however. Payday loans Winnipeg, for instance, is often searched online to find ways to get payday loans through the internet, rather than in person, making it even easier to get one of these loans. Taking out a loan instead of going into debt or having your credit go bad sounds like a much better alternative to some, and I agree! I would much rather take out a loan in Winnipeg than become homeless! But this leads down a rabbit hole from which I don’t think I could return. The number of people I owe money to would grow, while my income would stay the same, and my debt would linger in the back of my mind all the time.
I understand that sometimes debt is unavoidable – there are some situations in which there is just no putting it off. But if someone asked me for advice, I would tell them to do everything they could to avoid taking out a payday loan, because those are far more trouble than they are worth!