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Payday Criticism And Cons
Payday loans are convenient, but they are also one of the most criticised forms of borrowing. Knowing the downsides protects you from costly mistakes. This is Step 1 of 3 — let's start with the core criticisms.
High Interest and APR
The most common criticism is cost. Payday loans charge fees that, when expressed as an Annual Percentage Rate (APR), can run into the hundreds of percent. A loan that feels small can become expensive fast, especially if it is not repaid quickly.
Short Repayment Windows
Most payday loans are due on your next payday, often just two to four weeks away. For some borrowers that tight deadline is hard to meet, and a loan meant to relieve pressure can end up creating more of it.