Times are tough right now, and a lot of people have exhausted their cash reserves just trying to cope with inflation. When a financial emergency happens, that can leave them without the immediate resources they need to handle the situation. That’s why many people turn to payday loans.
Tennessee has the dubious honor of being the birthplace of the payday loan – although they’re now officially called “deferred presentment service loans.” While these can seem like a convenient solution to a temporary financial crisis, they can turn into a vicious financial trap.
The debt cycle can be almost impossible to escape
The annual percentage rate on payday loans in Tennessee can hit 460%, which means that borrowing this money already comes at a big cost.
When you’re living paycheck to paycheck, it can be nearly impossible to afford to repay the full amount of the loan on your next payday. Lenders often allow you to “roll over” a loan by just paying the interest rate and an additional service fee. This cycle can end up being repeated over and over – leaving borrowers with a principal balance that never gets touched.
Payday lenders prey on desperate people. They sell the illusion that they’re being helpful to people who lack credit and other financial resources, but they’re really exploiting people who don’t feel like they have any options. They don’t really care if you can pay your bills – as long as they get their money.
If you’re exhausted from trying to figure a way out of your financial distress, it may be time to explore legal solutions. Bankruptcy, for example, can help you eliminate payday loans and credit card debts so that you can get back on your feet.