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Payday Advance Loans Safer Than Most: How to Keep Them Safe

[Feb 19, 2009.]


Even in a credit crunch, there are a variety of different loan options that can finance your lifestyle. As you might expect, some are more risky than others. Payday advance loans fall on the less risky side simply because the money loaned to you is a percentage of your next paycheck. And that means no oversized loans that you know you’ll never pay back.

Staggering Statistics
Credit Cards.com offers some eye-popping statistics on the amount of consumer debt over the past three years. The total balance of bank-issued credit cards per consumer hit $5,710 in 2008; 55 percent of credit card users keep a balance on their credit card that same year. That should tell you that borrowing more than you make in a month is super risky. Payday advance loans operate on a different set of rules.

How to Borrow Payday Advance Loans
Stick to the following guidelines and you can dramatically improve your financial situation using payday advance loans:

  1. Restrict Your Borrowing to Emergencies Only. Payday advance loans aren’t for pleasure. They’re intended to cover unexpected expenses such as auto repairs, medical bills and house expenses. Don’t get cash to go on a cruise.

  2. Find a Reputable Payday Loan Company. There are payday advance lenders and payday advance lenders. Some are predatory; most are not. Do your homework and find a company with a solid reputation for customer service and satisfaction.

  3. Don’t Borrow Above Your Means. In most cases, payday advance loans represent a percentage of your monthly paycheck, reducing risk for the lender and keeping borrowers from getting in over their heads.

  4. Factor in the Repayment. Remember to set aside the same percentage of next months check that you borrowed this month. If that’s not possible, factor in the repayment over a few months to keep from paying exorbitant interest rates over time.

  5. Paying Paul. If at all possible, avoid taking out new payday loans to cover older ones. This starts an endless cycle of borrowing that is tough to break at best.

Despite getting a bad rap ion the press over the last decade, this is still a viable lending option for many. If used wisely, payday advance loans can be a beacon of light in a financial storm. Just a little bit of fiscal responsibility will keep you from becoming a victim of unscrupulous lending.

Credit Cards.com, Credit card industry facts, debt statistics 2006-2009


About Author:

Kelly Richardson is a freelance writer, marcomm consultant and digital entrepreneur. He’s written content for Fortune 500s Google, Yahoo!, Microsoft and Wells Fargo. Find out more about him at kellyrichardsoncopywriting.com.

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