FLOWOOD, MISS– Maybe you’ve had a flat tire or an unexpected home repair to make, and that empty wallet left you with limited options. Payday advance places are all over the state, but in the long run, they may not be the best option.
“In that type of environment, you find yourself in a situation that snowballs,” says Brent Walker, financial advisor with RiverTree Financial in Flowood.
Here’s how it works. If you need to borrow $100, you’ll walk into a pay advance business. If they charge 20%, you’ll write a check for $120. They’ll hand you $100, and when you get paid, they’ll cash your check. If this only happens once, it’s a great help.
“But the people who often use these services are living paycheck to paycheck,” says Walker, “so this becomes a more regular occurrence.”
Walker says if you borrowed $100 every month, you end up paying $240 a year to keep borrowing the same $100.
“You’re paying $20 to get your $100 back every time,” says Walker, “it becomes exorbitant.”
Walker says the best way to avoid getting into a problem with advance loans is to consult family, friends, and other needs before going for loan.
“If you’ve had a flat or a problem with your car,” says Walker, “or any service, you can check with that provider for a finance option.”