About 12 million Americans rely on payday loans each year to manage income volatility or handle unexpected emergencies. However, while payday loans are used to solve a very real problem, consumers are frequently abused by predatory payday lenders. Because of limited regulation and lack of better options, it’s not uncommon to read horror stories about people charged in excess of 1000% APR or getting stuck in debt traps.
Once a person is stuck in a downward debt spiral with endless rollovers and hidden fees, they can quickly see their credit harmed and bank accounts emptied, especially if they take a loan from an especially unscrupulous lender. Payday loan tactics such as hidden fees, rollovers, and unreasonably high interest rates have caused 22 states in the USA to limit payday loans or ban them entirely.
infographic by: www.lendup.com