USAinDebt

We live in expensive times and being short on cash is what a lot of us have to deal with. Unfortunately, “life” and “unpredictable” always go together, and you never know what the day will bring. Your car breaks down, the hard-disk on your PC is fried or you get sick, and suddenly your bank account has 2-3 dollars left, and the next paycheck is still 7 days away. You need cash and you need it fast. And if you already have maxed out all your credit cards, you are most likely not getting anymore credit to cover your unexpected expenses.

This is where the Payday Loan comes in. The loan sharks know that you are stuck, that you don’t have any other credit options, but you are working, you are getting paychecks and they can expect a good return if they lend you money. They already have a preapproved offer for you: “get the money as early as tomorrow, pay back when you get your next paycheck!” Isn’t that a great? You can get the money needed tomorrow and just pay back with your next check! Yes, it may be good, but at what price?

Payday loans (PDL’s) are one of the most dangerous and expensive loans that you can take. Unless you repay your loan back asap, you will end up paying back huge amounts for a small principal. Besides loan fees, which are usually about 20-50% of what you are initially borrowing, PDL’s usually can carry hundreds % of APR. That’s right: 500%, 600% Annual Percentage Rate is very common to Pay Day Loans. PDL lenders are setting you up with what seems to be a fair deal, hoping that you will fail to pay the amounts due on time and roll over your loan. That is when they will eat you alive. And with these tremendous APR’s, your balance will multiply daily. People fall into the Payday Loan trap, take out more similar loans and their credit files and financial status is ruined.

Besides high costs, Online Payday Loans pose another threat - your identity falls into the hands of unknown companies and individuals. When you are applying for a PDL, you are asked to enter most of your personal information, such as name, address, social security number, bank account numbers. This information is enough for anybody to take control over your personal account. You don’t know who you are giving your information to on the Internet - anybody can set-up a fake Payday Loan website with just some basic skills.

Summary: Before applying for a Payday Loan, stop and think, reconsider your other options. Ask your family if they can borrow you some money, call your friends. See if you can sell something, like your TV or your computer. Ask your employer if you can get a payday advance. Payday Loans can be a big hassle and they should be your last resort.

Tags: debt | fast cash | payday | loan | pdl | apr | pay advance | paycheck