Beware of Payday Loans!

Every once in a while, we all get into a financial bind, sometimes due to no fault of our own. Things such as emergency out of town trips, car repair, past due bills and children's expenses may hit you and come unexpectedly. Many may think "what can I do to resolve this problem?" The majority would say "why not take out a pay day loan and THIS will solve my short term problem." This is NOT always the best choice.

WHAT IS A PAYDAY LOAN?

In a manner of words, a payday loan is a short term loan that uses your paycheck as collateral for repayment. These ar normally drafted anywhere over a four to ten week status. They are used to solve short term problems and emergencies.

HOW TO OBTAIN A PAYDAY LOAN

There are a variety of ways to receive a payday loan. There are many internet payday loan services where approval is virtually instant with no income or employment verification. Many banking centers offer payday loans to their banking customers while most people can walk into a cash advance store and take out a payday loan. There is no credit check required, all you need is a valid driver's license or state identification card, a copy of your banking statement to show where funds are deposited and copies of your two most recent pay stubs.

FINANCING CHARGES

This is where things get tricky. I once took out a payday loan for $250.00 over the internet for Cash Today. I was charged $175.00 in finance charges and a $99.00 processing fee making my total loan $524.00 to repay over 7 weeks making my weekly payment $74.86. Therefore I was essential pay 109.70% more than the principal charge. So therefore, I was payment the loan, 100% in interest and then a processing fee. That was absolutely ridiculous.

WHY PAYDAY LOANS ARE NOT A GOOD IDEA

If you are like me (living on a fixed budget), then a payday loan is not for you. From my own personal experience, paying back more than what I borrow was just not within my budget means and therefore I fell short of my bills that month.

Payday Loans Can Be Addictive And Harmful

Credit: www.mycashnow.com

Copyright: www.mycashnow.com