With record unemployment numbers, many are feeling pressed for cash. A payday loan might seem like a quick, easy way to get cash fast but experts say to be cautious because it could end up leaving you in a worse position.
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Jim Temmer, president/CEO of the Better Business Bureau Serving Wisconsin said, the BBB has received thousands of payday loan complaints nationally.
“The biggest one is people didn’t realize how much it was going to cost. You have people taking out a lump sum and the interest rate is so high before they know it, they owe three times what they took out,” said Temmer.
Temmer said there is no cap on interest rates for payday loans in Wisconsin.
“The interest rate on these payday loans can be as much as 500% and most people are not aware of that,” said Temmer.
To help you make ends meet, the BBB said consider these alternative options: Renegotiate current debt with lenders, take out a personal loan through a bank or credit union, use a credit card cash advance, or borrow from your 401(k).
“Don’t ignore people trying to collect bills from you and try to work with them to prevent needing a payday loan,” said Temmer.
Temmer said if you must use a payday lender, never pay an up front fee, limit the amount you borrow, and read the fine print.
“Know your rights know what you’re getting into and use it only if it’s your last chance,” said Temmer.
Lastly, Temmer suggest slowing down, taking a second to do your research and checking the companies ranking on the BBB’s website.