It is not uncommon for people in Connecticut to find themselves short of cash with days to go before the next paycheck. Whether it happens because of poor planning or unforeseen circumstances, it is never a pleasant feeling. In fact, it may bring a sense of panic if there are bills left unpaid and necessities to purchase. While it may seem like temporary debt relief is better than none, some find themselves digging deeper into debt by using quick fix loans in times of desperation.
Actually, payday loans capitalize precisely on that feeling of desperation. Lenders provide small amounts of money for short periods of time with little-to-no credit check. The borrower merely signs a contract agreeing to repay the money at a certain time, usually within a month or less. The borrower may be required to leave a post-dated check or provide the lender with access to a checking account to electronically withdraw the money.
The problem occurs when borrowers cannot make the payment when it is due. This is often the case because quick loans typically serve to mask a more serious and chronic financial issue. If the deadline is not met, the lender may agree to extending the loan, adding even more fees to the already high interest charges, which can reach as high as 800 percent APR. In some cases, lenders are quick to involve collection agencies or even press criminal charges against delinquent borrowers.
The benefits of a payday loan are seldom worth the risk. Moreover, such loans do not address the real issue or provide long-term debt relief. To examine the options for overcoming the heavy burden of debt, many Connecticut residents seek the counsel of a bankruptcy attorney.
Source: thebalance.com, "Payday Loans: Beware of These Dangerous Loans", Jeremy Vohwinkle, Accessed on Aug. 12, 2017