Whenever you are in require of money urgently you are likely to ask assistance from a friend or a family member. If your condition can wait for a couple of days, you can apply for a loan from a bank. For anyone who is averse to approach a relative to borrow money, applying for a loan is usually the preferred option. Most of all the traditional financial institution has a very well-defined system that they follow when lending to individuals. There are many banks keen to lend only to those who can show their ability to repay back a loan. Folks applying for a loan will normally have to create their payslip, income tax notice, and other documents to satisfy the norms of the bank. But there are several persons who may not be able to meet the eligibility criteria of the banks. For such individuals, there are hundreds of licensed cash lenders who provide short-term loans such as payday loans to people who are unable to borrow money from other traditional sources. So, anyone who was refused loans by the bank can visit such cash lenders and successfully get the cash they are in need of. In fact, such moneylenders may also lend money to an individual who has an undercharged bankrupt.
In addition to the benefits offered by Payday Castle, there are several dirty financial tactics as well that they may follow. There are three primary tactics that lenders may use to trap borrowers in debt. Once you are aware of these tactics it will be easy for you to identify and avoid such predatory lenders who use them and help you save a lot of money and stress. Of late, payday loans have been in the information a lot. In many countries, lawmakers are continuously trying to strengthen the regulations on such financial products that are marketed to people who are unable to afford the unreasonable interest rates charged or short terms. Thus, understanding the tactics of the Payday Castle will help you self-confidently navigate your decisions which will have a lasting impact on your financial future.
Interest Rates and Fee
The very first debt trap method is the interest rate and fee charged by Payday Castle. The average interest charged on a short term loan deal such as payday loans is between 400 and 1,200% APR. This rate varies wildly depending on who you are borrowing from and where you live. The APR charged by the lender can tell you a lot about the moneylender. Usually, a payday loan will cost between $15 and $30 in interest for every $100 you borrow. The average amount that can be received as payday loans is $500. If the loan was repaid within the repayment term, which is usually a two to four weeks repayment period, it will cost the borrower as much as $620. The end cost of the advance may seem to be outrageous, bearing in mind that you are repaying it on time, making it quite difficult to achieve.
Short Terms Loans
The next tactic is offering the loans for a short duration. It is not always easy to come up with additional income or savings. Everyone has a general idea about how much they earn and will take home each month and what their regular expenses are. When you apply for short term loans and have to pay an additional $100, it becomes next to impossible. So, that is what payday lenders are exactly counting on to make money. The majority of the payday loan lenders offer a repayment term of just two to four weeks, which is the average pay cycle for almost all working people. So, that’s a very short time to come up with the borrowed amount in addition to the interest and fees charged.
In case high interest, fees, and short terms were not enough to trap you in debt, Payday Castle has another tactic available. The tactic is rollover. It can be a generally devastating blow to borrowers and to their financial status. There are many belongings that make an overturn dangerously. Payday Castle will often provide a rollover in the form of helpful service to borrowers. They will act as if they are providing you a favor by extending your repayment terms when you are unable to pay back on the decided due date. Such services should be avoided at all costs. This tactic will turn something that is advertised as a “short-term solution” into a “long-term debt problem”.