Payday Loans Infographic, USAA

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Payday Loans Infographic, USAA

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Payday Loans

The extreme interest rates and harsh repayment terms associated with payday loans make it hard to break the cycle and get out of debt.

The Payday Loan Cycle

  • John borrows $375 — the average payday loan amount See note See note 1 — to make rent.
  • He pays a $55 fee to get the loan — the equivalent of a almost 400% annual percentage rate.
  • Two weeks later, John can’t repay the loan and pays $55 to renew it.
  • John completes up taking out payday loans again and again for five months out of the year.
  • By the time it’s paid off, John spends $520 in fees and interest, plus the original loan amount.

Go after these steps to avoid relying on payday loans.

1. Look for alternatives. Explore options with a lower interest rate, such as a loan from your bank or military aid society.

Two. Create a budget. Figure out where you can cut back on expenses to free up cash flow.

Trio. Set aside money for emergencies. Work toward having $1,000 on palm. You can begin petite and increase the amount over time.

Four. Begin a debt repayment plan. Attack debt with the highest interest rate very first. Paying down debt frees up cash you can use to save for emergencies. See note See note Two For help and more information on how to get out of debt, visit nfcc.org.

Support Resources

  • A private financial counselor at your installation’s Military and Family Readiness Center
  • Your local military branch aid society

Visit usaa.com/debt to create a personalized payment schedule to pay down your debt.

Legal Information

Note 1 According to a report by The Pew Charitable Trusts, 12 million borrowers spend more than $7 billion on payday loans each year. On average, a borrower takes out five months’ worth of payday loans, each worth $375, per year, and spends $520 on fees and interest.

Note Two Proceed making at least the minimum payment to all of your financial obligations. Consider using extra money (if available) to pay down your higher interest rate debt very first. You should not consider skipping payments to your secured loans in order to accelerate payments to unsecured debt.

Financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312), a registered investment adviser and insurance agency and its wholly wielded subsidiary, USAA Financial Advisors, Inc., a registered broker dealer.

Information is accurate as of 12/2018, and is intended for use by USAA, its members and prospects.

USAA means United Services Automobile Association and its affiliates.

Payday Loans Infographic, USAA

Hide Infographic Transcript View Infographic Transcript

Payday Loans

The extreme interest rates and harsh repayment terms associated with payday loans make it hard to break the cycle and get out of debt.

The Payday Loan Cycle

  • John borrows $375 — the average payday loan amount See note See note 1 — to make rent.
  • He pays a $55 fee to get the loan — the equivalent of a almost 400% annual percentage rate.
  • Two weeks later, John can’t repay the loan and pays $55 to renew it.
  • John completes up taking out payday loans again and again for five months out of the year.
  • By the time it’s paid off, John spends $520 in fees and interest, plus the original loan amount.

Go after these steps to avoid relying on payday loans.

1. Look for alternatives. Explore options with a lower interest rate, such as a loan from your bank or military aid society.

Two. Create a budget. Figure out where you can cut back on expenses to free up cash flow.

Three. Set aside money for emergencies. Work toward having $1,000 on forearm. You can begin petite and increase the amount over time.

Four. Commence a debt repayment plan. Attack debt with the highest interest rate very first. Paying down debt frees up cash you can use to save for emergencies. See note See note Two For help and more information on how to get out of debt, visit nfcc.org.

Support Resources

  • A individual financial counselor at your installation’s Military and Family Readiness Center
  • Your local military branch aid society

Visit usaa.com/debt to create a personalized payment schedule to pay down your debt.

Legal Information

Note 1 According to a report by The Pew Charitable Trusts, 12 million borrowers spend more than $7 billion on payday loans each year. On average, a borrower takes out five months’ worth of payday loans, each worth $375, per year, and spends $520 on fees and interest.

Note Two Proceed making at least the minimum payment to all of your financial obligations. Consider using extra money (if available) to pay down your higher interest rate debt very first. You should not consider skipping payments to your secured loans in order to accelerate payments to unsecured debt.

Financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California, License # 0E36312), a registered investment adviser and insurance agency and its wholly wielded subsidiary, USAA Financial Advisors, Inc., a registered broker dealer.

Information is accurate as of 12/2018, and is intended for use by USAA, its members and prospects.

USAA means United Services Automobile Association and its affiliates.

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