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3 Common Practices of Payday Loan Borrowers


Borrowing a payday loan is like holding a double-edged sword – you can get hurt at both sides. For many people, payday loans are like blessings in dark times. For many others, they are curses that must be avoided. The benefits of payday loans are easy application and leniency. Yet, you shouldn’t miss a payment because you’d suffer from high interest and obscene penalty fees.

 

Based on many studies, the common practices of payday loan borrowers can affect how payday loans turn out. If you’re always trapped by payday loans, maybe you need to improve your borrowing habits. Use this checklist to see if you have any of the common practices of payday loan borrowers:

 

Loan Cycling

 

Loan cycling is the process of using one loan to pay off another. While some borrowers are good at this, others are mere victims. In a financial sense, loan cycling is not advisable because it weakens your financial mileage. The temporary relief brought by a repaid loan is nullified that you have another debt in its place. A better strategy is to consolidate all debts. This process allows you to combine all debts into one so that you only have to repay a large premium. However, not all lenders are open for debt consolidation.

 

Foregoing Repayments

 

Another common practice is foregoing repayments. A borrower may forego repayment and rationalize that he’d get higher income to cover penalties. This is a terribly wrong mindset that can send your finances spiraling towards debt. Once you have a payday loan obligation, do your best to repay it as fast as possible.

 

Lack of Proper Research

 

Due to financial situations, many borrowers forget about the importance of research. They jump at the first lender referred to them. Without research, you’d be forced to bite the terms offered by a greedy lender. This can lead you to a miserable financial state. To avoid this, spend time researching about payday lenders. It won’t take an hour to come up with a list.

 

The choices we make prior to borrowing can totally affect our financial direction. So, you need to make the right choice from the beginning. Otherwise, you’d regret borrowing all types of loans.


Categorized as: Personal Credit

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