Thursday, November 11, 2010

Payday Loan Scams

It's a trap!
Recently, more and more people have been turning to Payday Loans to get quick cash for an emergency.  As a result, more scams are popping up, and borrowers are experiencing the consequences.  If you do need to get payday loan, make sure you read all of the fine print so that you don't end up with a judgment or bad credit.

Some payday loan shops have been asking people to secure their loan with more than their paycheck; some have asked to use a car title or even a home's title as collateral.  If the borrower defaults on this loan (sometimes in as little as 2 weeks), the collateral becomes that of the lender.  Using your $10,000 car as collateral for a $500 loan is blasphemous.

The best way to avoid these scams is to just not use payday loans.  Have an emergency/savings fund for these circumstances as getting a payday loan just isn't worth it.