Proceed With Caution
Payday loans are essentially a short-term, high-interest loan. You borrow money against your upcoming paycheck and must pay weekly interest rates, which can be as high as 400% of the amount borrowed! Many of the loans are structured to renew automatically each payday and will garnish a portion of your wages to satisfy payments. If you fail to make a payment or the payment defaults you can be charged thousands of dollars in addition to suffering swift credit damage when the default is reported to the credit bureaus.
There is a high rate of recidivism debt associated with borrowing through pay day loans. In other words, most people borrow through a payday loan once and then end up needing others to pay for the first one. It is a cycle of borrowing here to pay a borrowed debt there. Fortunately, payday loans are one of the easiest debts to have discharged in bankruptcy. If you or someone you know are suffering under the mounting pressure of a payday loan, speak to a Houston bankruptcy lawyer right away. You can get out of this costly debt spiral!