As payday loan providers continue to expand across the country, they have started to come up with more and more innovative methods through which they can lure new customers into their places of business to apply for loans. One of the methods that is widely used is promising new customers low fee payday loans that charge a below-average fee or interest rate. Ironically, even these so-called “low fee” loans can end up costing you a whole lot in the long run. Let’s look at some of the reasons why payday loans are just not a good idea for most consumers, even if the fees and interest rates are lower than at some other locations.
The main reason why “low fee” payday loans can end up costing you every bit as much as other high interest personal loans is pretty simple: because they can turn you into a repeat customer if you feel that the lower payment makes it less dangerous for you to take out the loans. Payday loan providers depend on people visiting them on more than one occasion, and they know that even if they charge a low fee, they will probably make up the money in the long run when you return to them for yet another loan (or refer a friend or family member to them). And sure enough, like clockwork, some of those same loan providers who had low fees for you the first time may welcome you with higher interest rates now that their “special introductory” offer has expired.
So be careful the next time you find yourself being tempted by these “low fee” payday loans that are being promised on the corner. No matter how low a fee is, it’s never worth the damage it does to your credit report and future earnings potential. Most people who take out payday loans don’t really need them for a legitimate emergency anyway, so it might be best to ask yourself whether or not you really need the cash right away, after all. Good financial planning means you’ll have plenty more to spend in the future on the things that really matter, like your family!