Payday Loans

Payday loans are an understandably contentious issue in the financial world. Developed as a small, short-term alternative to larger loans and made available to just about anybody with a job, payday loans nevertheless have created a bad reputation for themselves with:

– High interest rates that continue to rise the longer an applicant takes to pay;

– A lack of a necessary credit rating, meaning the applicant can be as financially irresponsible as they want and still wind up with a loan; and

– A vast range of scammers operating said businesses who are out to cheat their customers.

Despite that last point, payday loans can still prove a decent way to get some extra money so you can survive until that next payday. The theory behind them is sound – you just need to know how to play the system and come out on the other side intact.

– First, you shouldn’t consider payday loans if you have a proven history of mishandling your money. Some people are just plain terrible at managing their financial affairs, and these individuals will find themselves at the short end of the stick if they try to get a payday loan.

– Second, for those who ARE responsible enough to get a payday loan, you absolutely MUST have it paid off by the assigned maturation date. Some institutions have automatic safeguards to avoid problems, but some don’t, and if your bank account lacks the necessary funds you’ll be in trouble either way. Wait too long and your debt will crawl into the stratosphere, and you’ll owe a lot more than you originally borrowed.

– Third, never borrow more than you need. If possible go for the minimum amount offered by a company and stick with it. That way you’ll limit the damages if you do go over the payment period by a few days.

– Fourth, always judge the company you use carefully. Read up on them online. Don’t rush blindly into a payday loan and discover that you’ve been scammed. More, don’t fall for companies who assure you of their much lower prices than other payday loan companies, as they’re probably trying to scam you in some way. If a company doesn’t ask for your employment information, back off.

–  And, fifth, be aware of the laws in your country. Because they’re such a contentious issue payday loans are banned in some states and countries, and if you’re getting one online you may be breaking the law without knowing it.

In the end a payday loan may prove too much for you to handle, and to avoid aggravating your debt you should avoid them altogether. Wade through the financial world responsibly, however, and a payday loan may be able to pull you out of a tight spot.