No-Payday Loans


No-Payday Loans

Most people have at least heard of payday loan providers. For others, utilizing a service of this type is part of their daily routine. Unfortunately, due to convenience and other factors, some people can overlook some of the risks of using a payday loan company versus a traditional bank. Due to certain practices utilized by most payday lenders, individuals can quickly find themselves spiraling into debt. In some circumstances the amount of debt may even become unmanageable and, despite best efforts, the individual may sink deeper and deeper into debt.

If you have encountered financial problems due to payday loans, the attorneys of Sadek & Cooper may be able to help you with bankruptcy-focused solutions. To discuss how the bankruptcy lawyers of the firm may be able to help you, call the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC at (215)-545-0008. You may also contact the firm by email at email brad@sadek-cooper-site.

What Are Payday Loans?

A payday loan is a type of non-traditional loan that is typically limited or small in nature. In many cases, people utilize payday loans when they are living paycheck-to-paycheck, are experiencing cash flow issues, or are otherwise temporarily out of money. Therefore, payday loans are also typically short-term loans of a duration of about two weeks. Most loans are for a relatively small money in the ballpark of $50.00 to $1,000.00.

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When seeking a payday loan it is common practice for the individual to write out a check for the full amount that is being  borrowed along with a percentage-based service fee charged by the payday lender. The check is generally left with the payday lender who you will instruct to deposit the check once you are able to repay the loan. However, until you repay the loan interest is accruing.

Costs of Payday Loans

Individuals who take out  payday loans often find that they are extremely expensive and they end up paying back many times over what they originally borrowed. Many payday lender borrows eventually determine that they have paid an annual percentage rate (APR) that may be several hundred percent. This is shocking when one considers that the typical mortgage rate is set at  4-11% or perhaps up to 35% on a traditional credit card.

To better illustrate the costs of a payday loan, consider that you might pay a $20 fee or more to borrow, plus daily interest. Let’s say you pay the $20 fee and take out a $100.00 loan for a two-week duration. According to calculations performed by tThe Consumer Federation of America, you would pay about 426% APR on this payday loan.

Why Do People Take Out Payday Loans?

People consider taking out a payday loan if they need a small amount of money, they need the amount of money fast, they are on a fixed income, have already maxed out on existing debt, have a lack of  savings, or are simply too embarrassed to go to a traditional lending institution.  However, instead of buying a few weeks longer by putting yourself into deeper debt with an extremely high-interest rate, the long-term solution would be to get rid of existing debt.

The problem with payday loans is that they are often marketed to and targeted at people who may be desperate and least able to absorb their high costs.  Unfortunately, it is the people who can least afford to pay the astronomical interest rate are the ones taking out such loans due to slick and persuasive marketing tactics that deemphasize the true costs and risks of a payday loan.  his is the main pitfall of a payday loan since the fees are so high, the debt becomes almost impossible to ever pay off and the overall debt increases extremely quickly.

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Should I Declare Bankruptcy to Get out of Payday Loan Debt in Pennsylvania?

Each and every financial and legal situation is unique and based on the facts and circumstances present. Therefore, it is not possible to recommend a legal strategy in the context of this article. However, for many individuals who have fallen deep into debt through payday loans, bankruptcy has provided solutions and a pathway out of debt. In the event one files for a bankruptcy, they are able to restructure or discharge their debts and be able to save for their future, rather than paying the high cost of payday loans.

Contact the Philadelphia Bankruptcy Lawyers of Sadek & Cooper Today

If you have questions or concerns you would like to discuss about bankruptcy law in the Philadelphia, Pennsylvania region, you may contact the Philadelphia Bankruptcy Lawyers at Sadek Law Offices, LLC at (215)-545-0008 or email  We are proud to help individuals in the Pennsylvania region get out of debt and move towards a sound financial future.


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