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Payday Loans have been criticized by many as a poor financial choice. These loans are also called Payday Advances, Salary Loans or Payroll Loans. Critics say that the interest is very high and that people can get into trouble once they begin to borrow money that way. Both of those statements can be true, but are not always the case. Just like anything else in life, if someone chooses to misuse assistance or abuse many other options that they have that normally are good, things can still end up to be bad lendup.com!
Let's address some of the concerns. The first concern is about the high rates of interest. It is true that the Interest Rates on these loans would seem astronomical compared to most traditional loan rates. But let's take a closer look lendup.com.
When a person gets a $100 Payday Loan and it costs them $20 to borrow it, many people would criticize that this is a rip off and that it is a form of predatory lending. They feel that it is unfair to people who may not fully understand the costs involved in this type of unsecured loan. They might say that Cash Advance Loans are too expensive when compared to other loan products or services and that Payday Loans should be avoided lendup.com.
Now, when your auto mechanic is fixing your car and he orders a part for you, what happens? Let's say that the part costs $100 wholesale to the mechanic and that the suggested retail price of the part is $150, which he charges you. Now he only had this part in his possession for minutes or possibly hours, but he still has profited by twice the amount of the Payroll Loan lender. The mechanic is taking a minimal risk that the part fails and he has to do the repair again at no charge. The Payroll Loan lender has taken a much greater risk by lending money to people whom other lenders would turn away lendup.com.