Using Payday Loans To End An Emergency But Not Cause The Next One

With the current state of the economy, more and more people are facing financial struggles. Emergency or unexpected expenses seems to be spreading like a virus and can arise suddenly. When financial lightning strikes, many people turn to payday loans for help. But it is extremely important not to use payday loans to end one emergency just to cause the next one. This guide will make you aware of some things you need to consider before diving head first into a payday loan.

If you’ve made up your mind and are definitely going to get a payday loan, please be sure to get everything in writing before you sign the contract. There are all types of  scams out there, and once an shady payday loan company gains access to your checking account they can do all type of damage to your finances.

Before taking out a payday loan, consider other lending avenues. Even if it’s taking a cash advance from a credit card, the interest rate could be lower than the payday loan. Also, consider asking friends and family for a loan instead.

Do Your Research

Look into the state that the lender operates from. Each state has different laws with regards to loans. It is not uncommon for unscrupulous lenders to work out of states or nations that lack strict regulation of payday loans. Whenever you learn which state the lender works in, you should learn all the state laws for these lending practices.

Investigate what the total cost of the loan will be. It’s fairly common knowledge that payday loans will charge high interest rates. Many payday lenders, however, charge large processing fees on top of the normal interest rate. The fees you might incur can be hidden in small print.

Know How Much You Can Afford To Borrow

Before you decide on the amount you want to borrow, take a look at your monthly budget. Know what you need to get by. Avoid borrowing against that money. You should base the amount you borrow on money you have left after budget expenses are met. Also, if you’re gonna go this route, it’s best to borrow less than 25 percent of your net pay.

Voice any concerns you may have and don’t be afraid to speak up if you experience a problem with your lender. This will allow them the opportunity to right their wrongs and perhaps offer you a more attractive deal.

Watch Out for SCAMS!

Cultivate a good nose for scam artists before you go looking for a payday loan. There are those who pose as payday lenders only to gain access to your personal information and rip you off. Many of these scam artists wind up being simply lead generation sites set-up collect your information and sell it wherever they can make a quick buck. So it’s best to deal with direct payday loan lenders only.

Now that’s not to say that every leadgen site is a scam, but to minimize your risks it’s just best to deal with a direct lender. If there is a specific company you are interested in doing business with, check out their credentials with the Better Business Bureau (BBB) and other consumer protection agencies.

If you decide to work with a lender via the Internet or by phone, you might want to consider one that does not require you to fax documents. A lot of payday loan companies will want you to send a facsimile to them, and you may not have the right office equipment to do this. This could mean that you’ll have to go to a separate source just to fax the documents you need and expose your personal information even further.

Payday Loans Are No Joke!

Do not take getting a payday loan lightly. Interest rates can vary by lender, but overall you can expect to pay high interest. Avoid using a payday loan for things that aren’t absolutely necessary. It should be a last resort to solve a short-term emergency only.

And by all means, avoid extending the loan. This just adds on to the already high interest and winds up sucking more money out of your bank account. Don’t make matters worse!

Now that you have a better understanding of payday loans, you may find that it can provide just the solution you need to get you through your short-term emergency. That decision is entirely up to you. Overall, payday loans don’t have to be a bad thing, but you definitely need to know what you’re dealing with and understand the terms completely before moving forward.

26 Replies to “Using Payday Loans To End An Emergency But Not Cause The Next One”

  1. I found your article very informative. You state the pros and cons without being judgmental. Two things I liked was your advice not to borrow against what is needed for your necessary bills and to watch out for scams. And of course, your reminder that it should be used as a last resort. Very well written!

  2. I love that you the pointed out how important it is to voice your concerns and talk it out with your payday lender. You should always try to see if they can be reasoned with by explaining the specifics of your situation. Terms don’t have to be set in stone and oftentimes a better deal can be had just by asking for it. Nice read!

  3. It is not always wise to borrow against your earnings but if you have to, make sure you have the capacity to pay. I agree that lending for frivolous things should be avoided at all cost and should be done in dire emergencies only when cash is to be needed.

  4. An excellent source of information regarding Payday loans! Article was well written and provide practical advice.

    I would turn to Payday loans only as a last and desperate resource.

  5. Excellent tips for anyone in the unfortunate position of having to look into this option . I don’t think anyone can stress enough the importance of reading and understanding the small print that is attached to these loans. Debt is nothing to be ashamed about , almost everyone has it . Only refer to a payday day loan as an absolute last resort, and be realistic in regard to the amount you can afford to pay back.

  6. You are right that interest loans are very high on payday loans. Everyone who gets one should just be sure that they have the money to pay it back. If their next paydays are booked out for other bills they aren’t going to be able to afford to pay their bills. With payday loans they are going to take the money directly out of your account whether you can pay your other bills or not so just be careful.

  7. I’m having family financial issues right now and desperate for extra cash. My friend introduced me to someone handling payday loans to help me. It’s really a great help. It was enlightening. Payday loans could be disastrous but can be useful in so many ways. I should think before I act. Thank you so much!

  8. Payday loans are really of great help in times of emergencies but situations wherein an employee should apply for a payday loan should be considered at all times. This article is a good start for employees thinking of applying for a payday loan.

  9. Payday loans are there for emergency purposes, but you really have a lot to think about whether you will take one or not. It is important, for any kind of loan, for you to have a payment plan that is according to your monthly budget. Also, borrowing money from close friends and family might be a better option because there might be no interest rate plus a longer time for you to pay.

  10. Payday loan really is NOT a Joke. If one is not careful enough it could be one’s downfall and could destroy a family. Let us think first before we act, Payload should be a last resort not a first option during a financial crisis.

  11. To ensure that your life now as a an average wage earner is without worry or problem and that your urgent needs can be covered, you must really consider looking at different options like payday loans. This is certainly a great read! A lot of people would readily jump into conclusion that getting fast money would be the best solution to end their misery without sometimes understanding the contract that they will be bind to for the next few months or years. This article helps people weigh the pros and cons of getting loans and make them fully aware of the do’s and don’ts as well.

  12. I’m so grateful I stumbled upon this article! It gives me the information that I need before applying for payday loans plus, it also contains tips to prevent being scammed. Thank you so much for posting this!

  13. This is a great read! It offers a thorough explanation of the lending process, terms and regulations, possible consequences and the pros and cons of availing payday loans–all without the confusing technical lingo.

  14. I agree with being cautious about lenders because there really are a lot of scammers out there. Too many people have been taken advantage of and checking with the Better Business Bureau is always a good idea.

  15. Wow, this article is really helpful. I like the idea of making computations first before availing loans. Sometimes we get overwhelmed with our situation and borrow money that is more than what we need and end then up not being able to pay ’em. So this one’s really a good reminder for us.

  16. Payday loan can be very attractive to many because it is like advancing their salary. I do agree to this article. First and foremost, we have to be mindful of our decision before signing in to this kind of agreement because it could lead us to addiction and unwise decision like lending money because you just want to advance two to three times of your whole salary.

  17. Payday loans aren’t a bad thing – when used wisely! This article hits the nail on the head, I know a lot of people who have seen the dark side of the payday loan system and were lucky to make it out. Interest and processing fees add up very quickly. Thanks for the info!

  18. I was happy to find this article. There’s often not a lot of information out there about the ins and outs of payday loans. I’m glad it affirmed that they really are only for emergencies and should be taken on only after careful consideration.

  19. This article provides useful information to think about before getting a payday loan. It gives excellent details and steps what a person will go through or need to do to ensure that he can loan safely from lenders and away from scams. It also explains the amount of loan to consider and if payday loan is the best option.

  20. This article is very informative for people looking to get clear answers about payday loans. Plus, it doesn’t confuse readers with technical words and conveys the message effectively for everyone to understand well enough. It all boils down to keeping tabs on how much you need to borrow, the interest rates and most importantly, the payment deadline!

  21. Payday loans are a fickle thing! This article does a great job of breaking down the do’s and do not do’s, what to watch out for and how to use them to your benefit. Simply put and easily digestible.

  22. People who are looking to get a payday loan may often be in a bit of a panic. Having a clear list, like this, of things to check before getting one can prevent a bad situation from spiraling in to something worse. I never would have though that a payday loan place could just abuse your checking account so easily.

  23. I agree that payday loans are really helpful in times of emergencies. We just really need to be careful in giving out our personal information and we should check the credibility of the bank especially when using credit cards because there are a lot of scams out there online! Let us be safe.

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