You see it wherever you go. "Get Fast Cash" or "Personal Loans" with no credit check, fast approval and a five-minute application. They make it so easy for people that need money right away to get it, but it comes at a price; these loans are usually at a high interest rate. They need to be repaid immediately and, unfortunately, the people taking out these loans are doing so because they face immediate money needs such as car repairs, monthly bills, or medical expenses. These short-term loans usually range from $100. to $1500.
As bad as everyone says these quick cash transactions are for the average consumer, where would these people turn to for money? Let's say, for instance, you have a sick child that needs medical attention, and you don't have medical insurance, and are living paycheck to paycheck. With no other resources, the only thing left to do is take out one of these loans, after all your child's health is at stake. Of course, borrowing too much money can be a real problem if you can't repay it. Accumulating debt is not what you want to see happen. What you should do is only borrow when a real emergency arises, and pay it back before you borrow again.
Sometimes debt can't be avoided. The economy has been in such a bad state - it's affected all of us in one way or another. The unemployment rate is at an all-time high. People can't find work, and they can't meet their bills. The price of everything has gone up - such as food, clothing, gasoline, etc. People find themselves living off their credit cards. We've seen interest rates on credit cards sky-rocket over the years forcing the average person deeper into debt. As a result, people have turned to debt counselors or credit counselors. They generally help to restructure their finances so they can pay their obligations and avoid bankruptcy. Bankruptcy should be a last resort because it stays on your credit history for 10 years.
Before filing for bankruptcy, there is another way to begin to get out of debt called Debt Consolidation. This entails taking out one loan to pay off many others. This is done to secure a lower interest rate. You also have to put your home or property up for collateral. Debt Consolidation is generally used when you have high interest credit cards with high balances.
Although unforeseen circumstances can arise when it comes to getting into debt, it's always best to control spending and not fall into the trap of a high interest loan or credit card if you don't have to.