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:
- 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.
- 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.
- 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.
- 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.
- 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.
Source(s)
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.
Rebuild.org brings you the latest news headlines related to Payday Loans:
- Iowa Legislature Drops Bill Limiting Payday Loans
The Iowa legislature recently dropped their proposal to limit payday lenders in the state, allowing them to continue offering payday loans.
[February 19th, 2010] - Online Payday Loans - Four Pros and Cons
People who need payday loans don’t have to drive down to their local lender’s store, queue up, fill in forms, and hang around while their application is processed. They can do the whole thing online in the comfort of their own homes. Too good to be true? Sometimes it may be.
[June 11th, 2009] - Payday Loans News Roundup: Legislators’ Pawns
There are two payday loans bills in committee on Capitol Hill. One of them would provide some extra protections for borrowers. The other would eliminate payday loans - and access to most other short-term credit.
[June 5th, 2009] - Payday Loans: What Happens When They’re Gone?
What happens when legislators come between consumers who want to buy a product and entrepreneurs who want to sell it? Check out the history of the 18th Amendment.
[May 29th, 2009] - Payday Loans: Consumer Group Admits 36% Cap Will Kill Business
Anti-payday loans campaigners have finally admitted that a 36 percent interest rate cap will eliminate payday lending.
[May 26th, 2009]
Recent articles related to Payday Loans:
- A Different Perspective on Payday Loans
Plenty of consumers have opted for fast payday loans in recent years to help them through a financial crisis, yet some consumer advocates have labeled these loans as "predatory." Not everyone agrees. Some financial experts even recognize the valuable role instant payday loans can play for some consumers.
[August 20th, 2010] - 7-Step Financial Plan to Reduce Payday Loans
While instant payday loans can sometimes offer the best way to access emergency cash for a car repair or a utility bill, developing a financial plan to get out of debt and improve your credit score should be a long-term goal.
[August 6th, 2010] - Payday Loans and Military Families
Military families, like the rest of consumers, sometimes struggle with too much debt and find themselves short of cash in an emergency. Military payday loans, as long as they are used correctly, are one option for a short-term solution.
[July 23rd, 2010] - Ten Ways to Build an Emergency Savings Fund
Consumers who turn too frequently to quick payday loans for emergency needs are likely not to have an emergency savings fund. Here are several suggestions for ways to start saving.
[July 9th, 2010] - New Report Shows Payday Loan Alternatives Costly to Consumers
The National Consumer Law Center (NCLC) released a study on June 8, 2010 that reveals that many loans offered by banks and credit unions as an alternative to payday loans are just as costly as short term payday loans.
[June 25th, 2010]
