How rolling over loans can hurt

Payday loans provide short-term financial assistance to those who are struggling to cover expenses month to month. To receive a cash advance, an applicant has to post-date his or her next paycheck as payment for the loan and any transaction charges.

In states that permit this practice, payday lenders allow clients to rollover their loan if they won't be able to live off of their reduced income. While this is beneficial to consumers, it can end up costing them much more money in the end.

The annual percentage rate (APR) on a loan is calculated by how many payment periods are in a given year. When a borrower takes money without paying off the initial cost, the APR rises continually until all debts are paid. If a repeat applicant does not budget his or her funds properly, he or she can be caught in a debt trap with little recourse or escape.

That's why it's important to understand all the fees and charges associated with payday loans. At CASH 1, we explain the APR and how much it'll cost you to take out loans before paying off previous bills. 

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