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BBB: Think twice before getting payday loans for holiday shopping
By: Joshua Zuber
EL PASO, Texas
High interest rates, unaffordable repayment terms and high-pressure collection tactics could make getting out of debt from an advance payday loan extremely difficult, according to the Better Business Bureau.
This warning comes as many cash-strapped consumers may find themselves in need of more money during the holiday season.
The BBB cites a Consumer Financial Protection Bureau study that states the annual percentage interest rates for payday loans average 339 percent.
Payday lenders tend to target people whose credit may not be good enough to obtain a credit card or bank loan, who therefore rely on advance short-term loans to get by, the BBB stated.
The BBB lists this advice if seeking a payday loan: Start with trust. Look up the company on the BBB website. You should never pay an upfront free, limit the amount you borrow, know your rights, read the fine print and keep documentation.
You can file a complaint with the BBB, the Federal Trade Commission and the Texas Attorney General if you feel a lender has taken advantage of you.