Cash 1 Blog
What Happens When You Default on Your Payday Loan?
Not every payday loan borrower earns enough money to cover his or her cash advances. Consumers default on loans when they underestimate the interest rates and fees that are part of their loans' total costs. These miscalculations result in penalties and lowered credit scores for borrowers.
The Atlantic wrote that payday loans have a 10 to 20 percent default rate. These numbers are higher than other popular lending options. According to the U.S. Department of Education, student loans have only an 11 percent default rate for public schools and 7.5 percent for private institutions.
The difference between the default rates for payday and student loans highlights the financial problems borrowers are facing. Many payday loan applicants live paycheck to paycheck, so covering fees in addition their loans is often difficult and sometimes impossible.
Before taking a payday loan, consider whether you'll be able to cover its entire cost. If you want to know how much you'll be charged for a loan in reno nv, call CASH 1 today. Our representatives will explain our interest rates and fees so you can make the best financial decision.