What to consider before you take out a payday loan
IDAHO FALLS, Idaho (KIFI/KIDK) - This first of the month many individuals may be wondering how they’re going to make ends meet, but there are a few things you need to consider before you opt to take out a payday loan.
The Better Business Bureau tells us before you sign to take out the loan, it’s important you know what kind of commitment you’re making.
A payday loan is a small short-term loan that basically allows you to borrow money from your next paycheck. Payday loans include high fees and interest rates.
BBB's Jeremey Johnson tells us payday loans in Idaho can have an interest rate of up to 652%.
“One thing is be wary of those up front fees, and if you are going to take out this type of loan, ask all the questions that you can possibly think of. If you are signing documents, read that fine print and make sure you're comfortable with the agreement that you're signing," Johnson said.
With the current pandemic Johnson says many institutions are offering grace periods. She says you should first contact the lender first to see if they will work with you and allow to pay when you have the money, instead of taking out a payday loan.
“There has been a lot of things put in place that people can get grace periods for things. So the Better Business Bureau suggests if you are seeing economic hardship and you are unable to pay your bills, you may want to contact that lender directly and see what you can work out, and you may not need a loan you may be able to work something directly with that lender,” Johnson said.
