Rumor and Truth About Payday Loans

Payday lenders and their customers have been all over the news for good reason – most people just don’t realize quite what they are getting themselves into. The problem has become such a financial epidemic that some states have started to outlaw payday lenders, or at the very least put laws on the books which make it nearly impossible for payday lenders to operate. Ask any financial advisor and they will strongly recommend against getting a payday loan too. All of this begs the question – are payday loans just as bad as everyone says?

The Quick Road to Debt

The general consensus is payday loans should be avoided at all costs. Payday lenders are not required to be licensed, bonded, or regulated by some of the most important laws providing consumer protection. Furthermore, the terms of the loan, and conditions under which most people resort to such loans, create a family-size recipe for disaster. If you pay the loan back on time (usually one or two pay periods), all you have to sacrifice is a pretty hefty fee. However, it is when you don’t pay up that really costs. With APRs ranging anywhere from 400% to 5,000%, one payday loan for just a couple hundred dollars could easily become several thousand in just a few months. Even worse, these loans seem to target those which are most likely to default and end up with insurmountable debt.

Who Uses Payday Loans?

Anyone with a checking account and regular job can get a payday loan without a credit check. Since there is no credit check, such loans are most appealing to consumers with little to no credit, and thus very few alternative options for fixing their financial pitfall – such as credit cards, savings accounts, or assets of any kind. So when a consumer does default on a payday loan, their only option for paying their debt is to either get another payday loan or declare bankruptcy, because with interest rates like the ones mentioned before, there is no hope of catching up.

Should You Get a Payday Loan?

There are certain circumstances where a payday loan could be useful – such as an unexpected bill or very temporary hardship. Don’t borrow more than you can definitely spare next week, and don’t even borrow if you can negotiate the bill, pay less in a late fee than you would on the loan fees, or use your bank’s overdraft protection to get the cash you need. If those are not viable options, bite the bullet and ask a friend or relative for the cash, or get a line of credit from an FDIC-approved lender or other similar traditional small loans. At the very least, if you absolutely must opt for a payday loan, shop around for a reputable payday lender with a good rate, and make repayment your number one priority when you do get your paycheck. Once this emergency passes, it is definitely a good idea to make sure it doesn’t happen again by saving two months worth of expenses, or at a minimum, one paycheck, as an emergency fund.

More Resources:

Check into Cash Advance Payday Loans
(877) 262-2274

The Cash Store
(800) 965-8963

Lighthouse Financial Group Of Tennessee Inc.
(800) 639-2274

Check City
(804) 782-2274

B G Loan & Jewelry Co
(562) 927-7296

Paycheck Loans
(303) 442-8882

Quick Cash Funding
(714) 535-9388

All Checks Check Cashing
(323) 735-6410

Payless Loans
(805) 683-6633

Check Cash Northwest
(503) 968-1010

Fast Check Cashing
(818) 996-2274

Check Masters
(877) 627-8377

DTS Financial Debt Settlement Company
(866) 432-1466

Cash Back – Pay Day Advance
(909) 915-1900

Cash Stop
(949) 548-3551

CASH 1
(888) 462-2741

Advance America
(305) 453-4875

B&R Check Holders Inc.
(760) 961-0889

Cash & Go
(951) 272-9999

Checks Cashed 4 Less
(800) 896-9062

Tampa Payday And Loan
(866) 672-7710

Rumor and Truth About Payday Loans

The Quick Road to Debt

Who Uses Payday Loans?

Should You Get a Payday Loan?

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