Can You Have Multiple Payday Loans?

The question that gets asked quite often involving payday loans is “Can I have multiple payday loans?” and the answer is not cut and dried by any means.

You can technically have as many payday loans as these companies will let you have but that does not mean it is a smart thing, or even a legal thing to be doing.

Lets take a look at how these companies work and how easy it really is to get buried in payday loan debt, how they will let you take out loans even when they are illegal, and how to avoid getting caught in the payday loan trap.

How they work

There are two types of payday loan companies, the brick and mortar companies you see in your cities and towns, and the online payday loan companies.

Lets go ahead and see what the similarities and differences are between these two companies.

These companies are the ones you would visit in your city or town if you were to go take out a payday loan.

You would visit this store and apply for a loan, usually around $500.00 and set up to be paid in full on your next payday.

You are required to have a checking account and a job that pays you at least $800.00 every two weeks.

You are basically borrowing a sum of money for an extremely high interest rate compiled by the day. The usual cost for a $500.00 two week payday loan is a payback of $650.00, due on your next payday.

The company will let you post date a check for the full amount due on your next payday, and they will cash that check on the appropriate day, and the loan will be satisfied.

That is a cut and dry brick and mortar payday loan sequence, except………..

Yes, there are always catches, and this is where things can go really bad really fast for the borrower.

Catch one:

Say the check bounces, and you end up not covering this payback. Your payday loan will continue to grow by the day as your checking account gets charged every payday you do not have the check covered on, meaning they will keep hitting your bank with this check.

All this on top of your checking account being charged with overdraft charges every time something hits it while you try to recover and get the checking account back into a positive balance.

Catch two:

Say you were lucky and caught that your check would not clear so you wnet ahead and called the payday loan company and asked them what you should do.

They told you that they could offer you a roll over, or extend your loan until your next paycheck as long as you just pay the interest charge of $150.00

You now have a loan again due on your next payday for $650.00 plus you just paid $150.00 for using their money the first two weeks.

Catch Three:

You decide you can not cover the loan payment when it is due, so you think maybe you could get another payday loan and use it to pay the first loan off.

You tell the second company that you do not have any payday loans out and they are more than happy to give you a loan, thus you have just possibly broke the law in your state, as some states make it illegal to have two payday loans at one time.

Welcome to the payday loan trap!

Online Loan Companies

These companies share some similarities to the brick and mortar stores but they are also vastly different in how they collect their payments.

You still need a checking account and income of $800.00 or more every two weeks, but you can also use any account that allows these companies to both deposit and withdraw money.

You can get up to $1000.00 deposited into your account many times the same day. This is a huge draw for someone who is in need of fast cash, but it also creates a bad situation in most borrowers do not pay close enough attention to the terms being explained once they hear instant cash.

Catch one:

These companies will charge you the same $150.00 to borrow $500.00 for two weeks, with a payback of $650.00 due on your next payday BUT, they do not collect the total $650.00 unless you request them to do so within 3 days of the loan becoming due.

This was explained while you were daydreaming about how you would spend your cash later that day, completely missing this important fact of your loan.

If you do not request this payment in full the loan company will hit your account for the $150.00 interest payment and reset your loan at the original $650.00 due again, on your next payday, IF you request they take the whole payment out.

This can lead to a person in constant roll over of their payday loans and the average borrower does this at least 5 times, costing them $750.00 to borrow the $500.00 for 10 weeks. Plus they still owe the original debt of $650.00!

Catch Two:

because payday loans are so hard to regulate they are active even in states that ban them, and they will let you have as many loans as you want to take out, leading to incredable payday loan debt.