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Last updated on April 19, 2014 at 5:20 EDT

Loans.org Outlines Need-to-Know Details About Payday Loan Rollovers

February 13, 2012

LOS ANGELES, Feb. 13, 2012 /PRNewswire/ — To help educate consumers, Loans.org has published a new article about the payday loan rollover: a mechanism found in the contracts of these cash advances that acts as a double-edged sword, protecting lenders from insolvency while trapping some consumers in an ever-sinking quicksand of debt.

Payday loans are demonized by some and complimented by others. Both consumers and industry insiders are found supporting both sides, but ultimately credence can be lent to each of their arguments: some consumers find enormous help in the payday loan industry, while others sink into a nasty debt trap that would cause even the most conservative of onlookers to feel sympathy.

Now that this type of lending is being thrust into the media week after week, it’s important for consumers to learn about this industry–particularly if one intends to borrow short-term.

Rollovers occur when borrowers take out short-term payday loans and then, instead of paying those debts off, opt to take out another advance to cover the balance. After several of these rollovers, borrowers can find themselves in over their heads, paying more in interest than their initial line of credit was even worth.

For instance, if a borrower takes out a payday loan for $100 with a $15 fee, then rolls it over three times, he or she will pay $60 in interest and fees alone to satisfy their debt. That’s why it’s imperative for consumers to find the best-priced offers, and to enter into such a contract with the full intent of paying it off come their next paycheck.

Source: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm

To learn more about rollovers and related issues, readers can go to http://loans.org/payday where they will find a frequently updated library of financing information. Additionally, prospective applicants can access a free-to-use quote-comparison generator that is designed to help consumers receive the lowest interest rates possible.

To access the full article on rollovers, readers can follow the “Articles” link at the top of any page on the site.

SOURCE Loans.org, LLC


Source: PR Newswire