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Credit: Alternative Financial Services

Many regions have a huge number of businesses generally called alternative financial services. These businesses include those that offer rent-to-own services, payday loans, title loans, buy-here-pay-here services, loans people take that are paid back when they receive their tax refund, and check-cashing services. These businesses typically charge very high interest rates and many fees for using their services.

For example, these businesses could charge $20 in fees and interest every two weeks for each $100 you borrow. For example, suppose you take a payday loan for $500, and it takes you two months to repay that loan. You’ll end up paying the company $400 in fees and interest in addition to the original $500 you borrowed. That’s right, to borrow $500 for two months, you'd have to pay $900! Be cautious when considering alternative financial services.

Click on the following to learn more about rent-to-own, payday loans, and prepaid cards.

 

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