Are Payday Loans Risky for Fast Cash

What defines a risky loan? This is usually means loans taken by people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, divorce and medical emergencies. This situation is unique and can be remedied with the right options.

Payday loans unlike collateral loans, often require credit checks or a payroll check to back the loan. Where a collateral loan say from pawn shop, only requires an article of value to secure it.

Why is the payday loan not for everyone? For many people, a lot. People borrow based on their paycheck. Sometimes a $250 loan can climb over $1,000 when not paid on time. Your most expensive credit card may have an interest rate of 28 percent or 36 percent maximum. Where the payday loan can reach up to 10 times that. For example: if a $100 payday loan costs you $15 for 10 days, that's an annual percentage rate of almost 400 percent.

With a pawn shop loan from Gems N' Loans, one can take something of value that you own like a watch, jewelry or musical instrument, to use as collateral in exchange for the cash you need, then pay it back in the future. Small or independent business owners often utilize pawn loans, or collateral backed loans, in order to make payroll. The only risk is losing the the article of value. The interest rates are also as low as 2%.