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A tight financial bind usually pushes people into making desperate financial decisions. Those decisions usually show up in the form of loans. While not every loan is bad, some loans should be avoided at all costs. In part one of Dead End Loans You’ve Got To Avoid, you will see three kinds of loans that could leave you in a worst off position than where you started.
- Pay Day Loan – This lending model may present itself as a logical, quick and fair solution that will hold you over until your next paycheck. But, what many borrowers soon realize is that it’s nearly impossible to satisfy the payments without falling behind on other important bills. Before you know it, you’re taking out another loan to satisfy the one you had before it.
- Car Title Loan – Unless you don’t mind risking your ride, car title loans are bad news. The interest rates are extremely high and the loan is usually due in 30 days. Many people have forfeited their vehicles because they just couldn’t pay anymore.
- Tax Preparer Loan – Tax preparer loans usually promise to give you the money the IRS owes you weeks in advance in exchange for a huge cut of the pie. Though regulations have cracked down on this practice some companies are getting creative by offering personal lines of credit with double digit interest rates.
Check out part two where you’ll get to see three other dead end loan types you should avoid.