Payday Loans – Too Good to be True?

You know the old saying, “there’s a sucker born every minute.”

We’ve all seen alluring advertisements about payday loans which make it sound so easy; “come in, write us a check, we’ll give you the cash and hold your check until payday.” It sounds so simple doesn’t it?  Of course, there is a small fee attached, which you’ve included on that check they are holding for you. Then payday comes, and oops you are short this money, can’t pay your bills, so you do what they hope you will do and return week after week for more money. Do not get involved in this scheme, you will regret it eventually. Try to think long term about your finances.

We all have our unexpected emergencies such as medical bills, auto repairs, house repairs and so forth. Crises such as these can turn your world upside-down and cause you to panic, especially if your savings are depleted and your most recent paycheck was exhausted by bills. Try to resist the temptation of these short term loans for several reasons.

High Interest Rates – most of these short term payday loans have extremely high interest rates. You will pay much more interest for this type of loan than you would for most any other loans. In most cases, even the interest on your credit card will be less.

High Fines – If you miss a payment, these loan companies will impose extremely high fines, often times as much as the original loan. Don’t get sucked in by attractive advertising, they are just waiting for you to default.

Where to Turn – You are far better off turning to friends, family or even a credit card to manage the current emergency in your cash- strapped situation. Interest rates will be lower or maybe even non-existent if the loan comes from a friend or family member. Be straightforward about repayment terms and follow through in the event you may need their support in the future.