Payday loans have come under attack as being the most evil and predatory form of lending on the market. Yes, these loans have high fees and short terms giving them astronomical interest rates. Yes, payday lenders provide loans to those are desperate for money. They DO serve a purpose however. Without short term payday loans, there would be a countless number of Americans without any access to lending. They would be unable to get money to pay for emergency doctors bills, car bills or to pay rent it their check came up short. These people, unfortunately, often have poor credit histories and can not obtain conventional funding. This makes them look into payday advances and these loans are financially risky for lenders, thus the high fees. So, no high fees, no payday loans and no funding for those with bad credit.

Those thinking of pursuing one of these loans need to use caution. You can not count on the lender to make sure that you are responsible. They will give you whatever money that you qualify for. It is up to the borrower to use their loan efficiently to avoid being taken advantage of and to avoid getting trapped in debt. Here are a fiveĀ things that you must consider when taking out a loan.

  1. Do you have any other source of funding?
    Look to friends and family for a loan. Ask your boss for an advance on your check. Have a garage sale or sell some things on eBay. There are many different ways to make money. Even if you can not make everything that you need, you might be able to limit what you borrow and avoid more fees.
  2. Can you ask your creditors for an extension?
    Many will give you extra time to pay to help you avoid defaulting. Your credit card company, for example, may allow you to pay interest only for a few months.
  3. Will you be able to pay the loan back?
    Will you be able to repay the loan at the end of the term or are you just postponing the inevitable and adding another creditor to your list.
  4. How much do you really need?
    Only borrow what yo need and no more. If you need $200 to pay rent, only borrow that much. Don’t take out an extra $100 as a cushion. It is easy to do, so do not be tempted.
  5. Are you constantly needing payday loans?
    If the answer is yes, you should seek some financial counseling. You need to get your expenses in order. Look into Consumer Credit Counseling.

Always remember, the only one that truly has your best interest at heart is you . You must take responsibility for your actions and you must use these loans responsibly.

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