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The possible risks of payday loans

On Behalf of | Feb 22, 2023 | Bankruptcy Law

It is no secret that facing dire financial challenges can be a daunting process, and those who face such hardships may wish to explore all their available options for aid. While there may be various paths with which to seek relief from the trials of debt, some options may only cause one’s situation to grow more complex. Payday loans are an example of a financial option that individuals in Maryland may consider appealing at times, but there are a variety of risks associated with similar measures. 

Addressing the risks 

While payday loans may offer immediate aid to those in financial need, taking on such obligations may come with a certain level of risk. For instance, studies indicate those who seek aid via similar measures may already be experiencing monetary unrest and may be unable to pay off these loans by the due date. Failure to meet the due date can trigger extensive fees and penalties that could cause loan balances to soar and create deeper financial concerns. 

Studies also indicate that most payday loans carry interest rates and fees that are much higher than the average rate on credit cards. Those who encounter financial strain may find that making the minimum payment due on these loans may only be sufficient to cover the interest. Falling behind on payday loans could also trigger constant phone calls and letters and dealing with debt collection attempts can be a stressful and harrowing process. 

A path for relief 

Individuals in Maryland who struggle with high levels of debt and remain uncertain of their available options for relief could benefit from consulting with an attorney prior to choosing a path. An attorney can evaluate a client’s financial situation and provide insight on creating a strategy with which to seek the required relief via the appropriate channels. Such guidance may help a person better prepare to protect his or her needs and interests and work toward cultivating a brighter financial future.