Payday loans have had a meteoric rise in popularity over the last couple of years. This is primarily due to the total lack of availability of credit in this lending sector.
As with most things like this that rise in popularity, various myths ten to surface. Quite often, these myths tend to start in the media, usually trying to scaremonger or cast doubts on a subject or product. However, the myths that get banded about are quite often the reverse of what is actually the truth.
This is normally because the myths are either based on hearsay, assumptions or misguided facts. As far as the myths surrounding payday loans are concerned, the previous statement stands out because if the myth mongers were armed with better knowledge of the industry, they would see that these myths do not stack up.
Sometimes myths are started intentionally in order for someone to get a negative viewpoint across. Another way is when facts get distorted or taken out of context when the subject gets involved in more and more discussions all over the place.
A classic example of this is where the media try to bring down payday loans by claiming that they have ridiculously high interest rates as depicted by the huge APR’s that are advertised. The issue is that payday loans have to quote an APR due to advertising rules and regulations. The problem is that an APR is designed to illustrate the interest accrued on a loan in a year. However, a payday loan does not run for 12 months, they are designed to last for a period of 7 – 31 days. So how can you logically apply a calculation to work out the interest charged in a year for a loan that lasts a couple of weeks? The result of using an APR is a grossly over exaggerated illustration of the facts, actually distorting reality.
To see a video that highlights the top 5 payday loan myths and tries to go some way to dispelling them, follow this link: payday loan myths.
You will hopefully gain an insight into the reality of the situation and see how silly some of these myths are.
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- Studying the Myths Circulating About Pay Day Loans
- Payday Loans Summarised
- Direct Deposit Payday Loans What You Need to Know
- Are Payday Loans a Good Move to Utilise in an Economic Crisis