05:26 16 July 2013
Wonga, a British company offering pay loans and other high interest, short-term, unsecured personal loans, recently promised to stop proposing other “roll-over” loans schemes for customers.
This transpired as Dean Dunham, a consumer rights columnist of the Daily Mirror, revealed that clients floundering with their monthly payments are supposedly advised by Wonga to avail of another loan to settle their current loan.
Be that as it may, many families are turning to these kinds of short-term loans just to eke out a living. If there has not been any major change in their financial situation, such as having a new higher-paying job, or falling into an inheritance, for example, chances are the previous loan may suffer in payment and the debtor may be forced to get another loan to pay off this loan and use as spending money whatever is left.
This is the basically the concept of a rollover loan. What started as an easy loan to acquire that can be paid within the paycheck cycle could possibly end up ballooning to a larger sum, having to pay an additional amount. Following this routine on a monthly basis could surely put any debtor in a bind.
Most individuals, especially when in need, can be enticed by the ease by which these short-term loans can be acquired and the matter that it can be rolled over if not paid within the term. But this type of rollover loan is seen by some as being a bad investment no to be considered if there are any other options. But if you must, make sure that you know how much the fee is each time you roll over and try your best to pay your loan with the agreed term.
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