Friday, June 9, 2006

In covering this ever-changing industry, the Payday Loan Times comes across a wide variety of short-term lending organizations and news regarding them. In trying to appeal to prospective clients, a payday loan company will often tout its faxless loan system, along with the general speed and convenience of its service.

That, in itself, is not surprising.

The nature of payday loans is that they are fast and make the consumer go through fewer steps than conventional loans. But what piques our curiosity lately is the efforts of payday lenders to market their supposedly low-cost, or cheap payday loans. Can such a thing even exist, or is this solely a hook to lure unsuspecting, desperate customers?

In our opinion, it's all in the interpretation.

It all depends. Take a step back and examine your situation. While it might be hard, literally, to see how a cheap payday loan is even possible, given the interest rates involved with most transactions, it is very possible that given the particular circumstances a person is dealing with coming in, well, a payday cash advance might easily qualify as cheap by comparison.

Think about it. If you're in the position where you might get the power turned off in your house or apartment, the cost of NOT applying for a payday loan could be far greater. Plenty of utility companies, having monopolies in their particular geographic region, will charge egregious fees just to turn your power back on after it's been disconnected. That's after you pay the money you owe for past bills. So you are looking at possibly several hundred in fees.

That's just one example. There are many more, and each is likely to make the $75-100 fees associated with payday loans (assuming you borrow $500) appear tame. Let's say you need to get a car repair done and quick, because you work 20 miles away from home and can't exactly catch the bus. If you were to lose your job, or even a day's wages, you could be facing far greater problems.

We could go on and on. But you get the idea. Regardless of the details, the concept in play is similar. The fact of the matter is that a low cost payday loan may or may not apply to you, depending on your situation. You are going to have to evaluate it on your own, because only you know precisely what your money problems are and what options are at your disposal.

But play it smart. Whatever you decide about payday loans, be cautious. Even if you have concluded that this is your best option, there are still things to consider no matter who your lender is. Before you close the deal for payday loans online or in person, be sure all your bases are covered, and that you have planned ahead. Responsibility will ultimately lie with you. Always remember…

1. Avoid predatory lending. Like any industry, there are reputable payday loan firms and ones that should be avoided at all costs. Learn the tricks to watch out for by following the link we have provided.
2. Pay the loan off on time. Avoiding rollovers is key to putting this matter behind you and moving on with life. If you extend your payday loan, you open yourself up to steeper rates and more headaches.

This entry was posted on Friday, June 9th, 2006 at 7:42 am and is filed under Advice.