Payday loans help people fix financial problems in order to steer debt away. Sometimes the course taken is successful while other times, the debt drags on. Keeping debt around for too long can make a working budget go weary and many times financially collapse. What is debt? Why do we have it? How can we make it go away?
Wikipedia defines debt as – an obligation which is owned by one party (the debtor) to a second party (the creditor). It goes on to explain how it usually refers to assets but can also include moral obligations with no economic value. Since this is a payday loan blog, the assets definition will be the object of discussion.
Debt is created when the assets loaned to the debtor are used. The debtor will now be expected to repay those assets with an additional cost calculated from an agreed interest amount. Before any debt can be created, there will be an agreement in the manner in which the debt will be repaid. This agreement will include a signature as a promise to uphold the agreement. Back in the day, someone’s word or a handshake was all that was needed between a debtor and a creditor. Modern society, excessive debt amounts and frequency of transactions have placed debt into a position to control everyday life for many people.
Payment for debt can be made in increments over a period of time or all at once. The term of the loan is agreed upon before assets are transferred. Credit card companies are well known for using the payment over a period of time method while low cost payday loans opt for payment all at once. Some borrowers like to have debt spread out over a period of time, while others want it paid and out of their budgeted expenses each month.
Payday loan lenders expect debt to be paid in full.
The agreement signed by the debtor clearly states that a low cost payday loan will be due in just a few short weeks. When the payment is not made in full, the low cost variable is exchanged with a high interest rate applied to the balance. The debt will accrue and could possibly cause a debtor to fall further behind with this debt or debt owed to other creditors.
The downside to debt is that it is very tough to get out of once the debt gets too big. Spending beyond one’s means is part of modern society. It is an accepted lifestyle choice. When income does not support the additional payments, trouble begins to brew. Long-term debt is a constant demand on monthly income. Short-term debt is a bit more painful, but once it is over, it gets forgotten. Think about a band-aide. Pull it off at once and feel the pain, sharp but over quickly. Take your time pulling it off and you will feel it pull a bit each time you try to move it knowing that eventually it will be over.
Online payday loans are good options for short-term loans. The money gets into the bank quickly with a fast payoff. It’s a great band-aide for small money problems.
