Bias for action. Gets things done. Go-getter. Traits companies big and small look for. And for good reason, you're being hired to do things! However, action is a secondary step that often overshadows the primary step, direction. Clear direction is the foundation that enables our actions to takeoff. Without it, we're stuck in the mud. Striving for clarity is an underrated skill. Having the courage to ask ( seemingly ) obvious questions, and to check in, making sure we're all on the same page. "O bvious " questions are a low risk, high reward way to add value. At worst, you'll add confidence to our actions. At best, you discover a misalignment that saves us from a dead-end. The more people, the more clear we need to be. The bigger the initiative, the bigger the risk of reaching the finish line, only to realize expectations were off. Success is always uncertain. But we can be certain about what we want and what everyone's job is. Things that can be clea
With as many locations as Starbucks, and even more locations than Mcdonald's, you're never too far from a payday loan.
Payday lenders are a staple of shady neighbourhood corners and rundown strip malls. You'll recognize one by the many "get money fast" signs plastered all over their windows.
Storefronts are often bleak, rundown, and unwelcoming. As someone who've never step foot in one, they've always been a mystery to me. Why do they exist? Why are there so many of them?
Payday Loans
Payday loans are short-term loans offered by alternative lenders (non-banks). These loans usually range from $100 - $1,500.Loans last typically 1 - 4 weeks (depending on the borrower's pay schedule). Payday loans are due on your payday, hence the name. They're designed for people can't access funds through traditional lenders, could be due to low credit scores, low assets, high debt, etc.
Payday loans don't require a credit check or a deposit. You simply provide proof of income, an address, and access to your bank account. When payment comes due, the lender will automatically withdraw the amount due from your account.
Easy money, right? Well this comes at a price (a really high one).
The Costs
Payday loans are typically priced per $100 borrowed. Most lenders charge between $15 - $25 per $100.
This might sound okay at first, but when you calculate the interest, you realize how absurdly expensive this actually is.
The formula to calculate interest rate, also know as the Annual Percentage Rate (APR) is:
APR= [(Interest/Loan Amount) x 365]/Loan Period
For a 1-week loan of $100, a fee of $15 equals to an annual interest rate of:
[($15/$100) x 365]/7 = 782%
This is an atrocious amount of interest. To put this in perspective, the average credit card (which are already considered to have high interest) charge only 17%. A bargain by comparison.
If a payday loan cost $15 per $100, how much does $100 cost on a credit card? We can rearrange the above formula to help us calculate this.
Interest = [APR/(365/Loan Period)] x Loan Amount
Plugging in the numbers, we get an interest payment/fee of:
If a payday loan cost $15 per $100, how much does $100 cost on a credit card? We can rearrange the above formula to help us calculate this.
Interest = [APR/(365/Loan Period)] x Loan Amount
Plugging in the numbers, we get an interest payment/fee of:
[0.17/(365/7)] x $100 = $0.33
Big difference! Payday loans make a lot of money with their hefty fees. It's a $90 billion industry and growing. That's why you see them everywhere.
Avoid, Avoid, Avoid
If you have access to traditional banking services, payday loans should never be an option. These loans are the absolute last resort. Almost anything else would be better.Their high fees often lead borrowers towards a cycle of debt - taking out new payday loans to pay off previous ones, again and again. Compounding more and more interest. Snowballing debt that becomes near-impossible to get out of.
If you're in an emergency, look to other options. Work with banks, credit unions or government programs. Stay as far away as you can from payday loans. Nothing is worth 700% interest.
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