Don't Get a Payday Loan: Here's Why

Payday Loan If you’re struggling with debt and just barely scraping by, a payday loan can be extremely tempting. But we urge you to avoid this type of loan-also called a cash advance loan, check advance loan, post-dated check loan, and deferred deposit loan-whenever possible.

What’s wrong with payday loans?

According to the Federal Trade Commission, payday loans work by having the borrower write a check for the amount he or she is borrowing, plus a fee. The company gives the borrower the amount, minus the fee to the company. At the borrower’s next payday, the loan is due. If the borrower can’t pay, the lending company “rolls over” the loan and charges the same fee again.

Borrowers can quickly get in over their heads because of the astronomical fees that lenders charge. A $100 loan could have a fee of $15. If the borrower has to roll over the loan three times to pay back the $100, they end up paying $160. That’s nearly double the amount of the original loan!

The fees and interest rates charged with payday lenders are impossible to manage. The example above is conservative: some payday lenders have charged interest rates of 500 percent or more! This traps borrowers into a cycle of debt: many average 10 payday loans a year and pay $458 in fees-money that people with debt certainly need for necessities.

Fortunately, states across the U.S. have recognized that these practices are predatory and have cracked down on payday lending, according to the New York Times. According to the article, “New York authorities have ordered 34…online and American Indian lenders to stop providing online payday loans in the state…”

If you’re considering a payday loan, consider the alternatives. You may be able to borrow a small loan from a credit union or small loan company. You may also want to shop around for a credit offer with the lowest interest rate and finance charge.

If you’re having trouble making your payments, it’s probably time to think debt relief. You might want to try talking to your creditors about getting an extension on your bills or to a Washington credit counselor about your debt relief options. If you’re facing a significant amount of debt, bankruptcy is another option that may be right for you.

Client Reviews
★★★★★
I cannot thank Mr. Newcombe and his staff enough. They are awesome. When I first contacted his offices, I didn't know what to do. I was overwhelmed and confused. He did an amazing job, I highly recommend him! I had two cases, and he got both of them dismissed. If you are in trouble, do yourself a favor, give him a call.
★★★★★
I had Mr. Newcombe's firm handle my ticket and I greatly appreciate their assistance. It was handle easily and with good communication from the associates. If you need assistance with some legal matters then I would refer you to them.
★★★★★
Jason Newcombe and his Associate's are all top notch individuals who will fight tooth and nail for you and go the distance to ensure that you receive the best outcome possible on your case. I would not be where I am today if not for the Law offices of Jason Newcombe.
★★★★★
I feel very fortunate that I chose Mr. Newcombe to represent me. He and his staff were amazing at keeping me informed and telling it to me straight. I don't plan on needing a lawyer again but if I do I'll be giving Newcombe a call.
★★★★★
Jason Newcombe is an excellent attorney. He is proffessional, well-spoken and intent on achieving the goals set out during his initial couseling. If you are looking for an attorney to best represent you throughout your court process, Mr. Newcombe is a gifted rhetoric who presents his cases flawlessly and dedicates the entirety of his free time into making sure his clients receive the best possible outcome.