The key to protect people against the dangers of payday loans is to educate them about it.
Los Angeles-Long Beach, CA (PRWEB) May 06, 2013
Debt Consolidation USA reacts to the reports given by LA Times that payday loans can trap consumers in a cycle of debt.
In April 23, LA Times released an article entitled, “Payday loans trap people in a cycle of debt, U.S. watchdog says.” The article cited reports that the average American consumer takes out 11 loans within a 12 month period. The article also mentioned that they are paying $574 worth of fees - an amount that does not include the principal amount of the debt. All these reports were taken from the data of the Consumer Financial Protection Bureau.
The article cites a comment made by the director of the bureau who said that consumers usually pay off payday loans but quickly returns to take another one. The article indicates that this is a sign of a continuous debt cycle that the average American is obviously trapped in. Debt Consolidation USA agrees with that completely and it is a dangerous sign that consumers are not really learning their lesson when it comes to debt.
The debt relief company believes that once again, the key to protect people against the dangers of payday loans is to educate them about it. People do not realize this trap - that is why they continue to subject themselves to the high interest rates of this loan type.
That is why Debt Consolidation USA released an article titled, “Things you should know before you get a payday loan.” This article was published their website on April 24 and it provides the following information about these loans.
1. Consumers are usually offered by lenders the maximum amount that they can loan. If the loan is necessary, only get the lowest amount that is needed to satisfy the immediate financial need.
2. Interest rates of payday loans are extremely high - ranging between 300% - 800%. Failure to pay it off immediately will result in high fees and penalties.
3. Payday loans are very appealing because of the fast approval of the application. Take time to do careful research for other options before continuing with the loan.
The debt relief company stresses that consumers should only opt for payday loans as a last resort. There are other options like debt management that can also help with consumer debt.
To know more about other debt relief options that may be better than payday loans, visit the website of Debt Consolidation USA.