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Big Payday Loans Mean Big Trouble

If you’ve ever taken out a payday loan, you are probably quite familiar with the drill. You go in, let the lender know how much money you need to borrow. You write them a check, which they will cash in two weeks. If you don’t have enough in your checking account to cover the check when the two weeks is up, you wander back into the payday lender and take out another loan. In some cases, the next loan you take is even bigger, because not only do you have to cover the original loan amount, you have to pay the fees on the original loan.

Keep this pattern up and you’ll find yourself in big trouble. Those fees may not seem like much, but they add up and they add up fast.

Let’s say, for example, that you find a payday lender with relatively low rates. They might charge you $8 per $100 borrowed. Maybe you needed $225 to get your car fixed. The payday lender only gives loans in $100 amounts, so you borrow $300 and write a check for $324. You plan on taking the extra loan amount and setting it aside.

Well, of course, it doesn’t always work that way. It might be that you had another emergency crop up, or that you just decided to take that extra money and buy your girlfriend a nice dinner at that sushi place downtown.

Hope it was worth it, because now you’re hosed. Come payday, you may not have enough to cover the payday loan. Sure, you’ve got $80 that you can put toward it, but remember that the lender doesn’t loan amounts less than $100. So, you borrow $300 again, at another cost of $324.

One thing leads to another, and two weeks later you’re no better off. In fact, you decided to take in a concert, and wound up blowing $150 unplanned between your tickets and a couple of T-shirts.

Come payday, you don’t even have the $324. So, you take out a $400 loan, at a cost of $432 this time. Now you’ve paid a total of $80 in fees, in just a month and a half, and you’re no further ahead.

Avoiding this kind of payday loan mess isn’t always easy. Sometimes, it means borrowing less than you need. If your car repairs are $225, borrow $200 from the payday lender and get the other $25 from a friend or family member. Buckle down in between, so that you really can pay off your payday loan.…

Payday Loans

You have run into a snag and you need a quick bit of cash. Where do you turn for the money you need to get by? Let’s take a look at some options and how they stack up against the payday loan option.

Credit cards
You might hear people talk about how they need a credit card for emergencies. These might work for some people. What usually ends up happening is people will carry a balance on these little plastic cards.

This balance ends up costing more than you think. Months of interest only compound and grow. Soon you will have paid more in interest payment than you will have paid for the original item. Credit cards can actually cost you more than a well-used payday loan.

Personal loans
Personal loans are great if you have a good bank. Not everyone can acquire a personal loan though. People with bad credit have an especially hard time getting loans. Banks also take some time to handle all the paperwork. The convenience of walking in and walking out in a matter of a few minutes is lost to the banking process.

Just like credit cards, a personal loan will come with interest to figure out as well. A payday loan taken care of right away might run you $35 to get. What will the interest over the personal loan duration run you?

Sometimes you just need a quick $100 though. A bank will not even consider this. This is where a payday loan can come in and help. Just make sure that you only take the $100 that you need. You also need to make sure you pay this back as soon as possible.

Selling items
Selling items on your terms is a great way to make up money. Selling items in a bind will lead to people taking advantage of your situation. Taking your grandfather’s wedding ring to a pawnshop might sound like a great idea at first. Think it through though. The pawnshop is out to make money for them. They are going to give you the lowest offer they can. This way they can sell it at five times the amount and make a killer profit.

Let’s say you decide to have a yard sale. This might be a viable option in the spring. Yet, what happens in the winter months? Even worse, what happens when you need the money today? You cannot get word out fast enough to hold a successful yard sale at a moment’s notice.

A payday loan in this situation would get you the money you need today. You might still have to organize that yard/garage sale to pay the payday loan. The advantage here is that you have a day or two to get your yard/garage sale organized and advertised.

No matter how you shake a stick at it, you need to make sure you pay off that payday loan within the original allotted time. Going past this time will only make your payday loan interest rate go sky high. Payday loans can be helpful if utilized correctly.…

Get Money Cheap

Everyone is looking for a deal. You want to get a deal on cheap groceries. You want to pay less for cheap gas. You don’t want to pay too much for anything, not because you’re cheap in general, but because you don’t want to waste money that you may or may not even have in the first place.

You even hope to find something cheap when it comes time to borrow money. Yet, you still find yourself inside the payday loan store getting ready to pay as much as 400 percent or more in interest on a couple hundred dollar loan.

Fortunately, there are alternatives. There are ways to get money cheap without having to resort to the payday loan trap. Here are some ways to try to get the cash that you need before you walk through the payday lender’s doors:

Ask for money from friends or family. It can be humiliating, to be sure. But is it 400 percent interest humiliating? Probably not. Consider drawing up a written loan agreement to help avoid problems down the road.
Ask for money from your bank or credit union. Many banks, and many more credit unions, may be willing to make smaller dollar loans. If you don’t ask, you’ll never know.
Consider a credit card. Credit card interest rates are lower than payday loan rates, and you have longer to pay them off. If you can avoid taking an actual cash advance from your credit card, do so, because the fees and rates that come with a cash advance are much higher than those for purchases. Just about everyone takes credit cards now.
Look into overdraft protection. Now, this can get quite expensive, too. Check with your bank to see if you can get overdraft protection, and then make sure you only overdraft once – so that you’re not paying the overdraft fee over and over again.
Wait for it. Sometimes, you just need to hold off on a purchase. No, that doesn’t get you money cheap, but it does save you that huge amount of interest you’d pay if you can just maintain a little patience.…

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