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Payday loans allow borrowers to take out small amounts of cash (usually not more than $500) in exchange for extremely high interest rates and fees. Although some states limit interest rates to 36 percent, in others, like Texas, borrowers can expect to pay as much as 664 percent on interest. What’s more: only 14 percent of consumers who take out these loans are able to pay them back, which is why you should refrain from using them altogether.

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