Sometimes, debt can’t be avoided. We need money and we don’t have any available, so we turn to loans and credit cards. It’s the natural way of our society, and sometimes, taking on credit can be helpful. There are some loan types you should avoid. These debts often have high interest rates that make it difficult to pay back. This makes debt costly and lasts a long time.
Be cautious when you are considering the following four loan types. Do not take these types of debt lightly and make sure you have a plan to repay them as soon as possible. In fact, before you take out these types of loans, make sure you’ll be able to pay them back. You should avoid these loans at all costs.
Four Loan Types You Should Be Careful With
#1 Payday loans
Payday loans should be avoided at all cost! Payday loans are meant to keep you coming back for more. These loans have unreal interest rates. I’m talking 100%, 150% and higher. That means when you do pay the loan back, you’re basically paying double (or more) the loan amount.
Payday loans are not something you should consider. Payday loans should be considered a last resort due to the high interest rates