Pay Day Loans

[siccmadeinc]

What do you do when you need cash quick...

[ahimel]

Depends on how much you need, and why you need it. If you owe $10,000 to the Mafia or they'll break your kneecaps, that's a different matter from owing $100 to the phone company or they'll shut off your service.

If you only need a couple hundred, and you live in a mostly-Christian Capitalist country (like the US), see about getting a retail job. The store at which I work underestimated the holiday help they'd need, but haven't bothered looking for someone else because they know they're unlikely to find someone willing to work only 4 days. We can't be the only store with this problem; you only need to find the one in your area.

Payday loans, at least as they work in the US, are always an option, but try to keep it as a last resort, because you get very little of your money. Check with friends/family/coworkers first. Ask your boss for an advance or a holiday bonus.

Also, see if you can put off paying until you have cash. Most creditors (again, at least in the US) are used to people not paying them at all. If you call and explain that you're happy to give them money, but you don't happen to have any right now they'll usually find a way to make a payment schedule that will work for you. See also How Not To Pay Your Bills

[Crispin]

I used payday loans a few times, and while I don't plan on utilizing this type of service in the future, it did help me out for a short period of time. I had rid myself of credit cards and hadn't built up enough income to cover my expenses in time. They basically helped me avoid late fees on my utilities, which would have been more than the cost of the loan. Hope that helps.

[TSchmitt]

Payday Loans = Costly Cash - ftc.gov article

"391 percent APR" !!!

[stella]

A payday loan or paycheck advance is a small, short-term loan that is intended to cover a borrower's urgent expenses until their next payday. Typical loans are between $100 and $1500, are usually on a 2 week term, and usually have interest rates in the range of 390 percent to 900 percent (annualized). They are also sometimes referred to as cash advances, though that term can also refer to cash provided against a prearranged line of credit such as a credit card.

Regards
Stella

[Addict]

I'm trying to figure out the advantage of these loans over credits cards. If you got your "pay check" or whatever source of income before the next bill, you would pay no interest. Instead you're going to be paying 390% APR?

I guess if you need cash, credit cards won't work. I would first try to borrow from friends or family.

[CStrunk]

Originally Posted by Addict

I'm trying to figure out the advantage of these loans over credits cards. If you got your "pay check" or whatever source of income before the next bill, you would pay no interest. Instead you're going to be paying 390% APR?

I guess if you need cash, credit cards won't work. I would first try to borrow from friends or family.

Credit cards can give you cash. You can get a "cash advance" which transfers money from your balance to your savings/checking account. This means you owe $x on your card but have $x in your account. You also will probably be paying your credit card rate on that money, but I guess that's better than 391% interest.

[Addict]

Well, then I really don't see the purpose of these loans.

[master01]

There have been tragedies in both types of credit – credit cards and payday loans – but which is the lesser of the two evils? It really depends on how well you are able to manage your money, and how well you can guarantee that you’ll be able to satisfy a debt when it is due.

Bankrate.com sites a specific example of a woman who borrowed $150.00 from a payday loan center. Six months after the fact, she was still suffering from the same set of problems that brought her to the loan center in the first place, but by then she owed more than one thousand dollars and the payday loan center was threatening to throw her in jail.

[SamFisher]

There are alot of people out there (me included) that have poor to no credit, we cant get credit cards. And as far as the huge annual percentage rate these loans are not meant to be out for a year. I don't want to seam like I am promoting payday loans but IF you are going to measure something use the right form of measurement (looking at a payday loan's APR is like measuring how tall you are in miles).

There are many payday loan comapnies out there (hundreds of thousands), this is a key indicator that they provide a service that people need and are using.

Lastely if you do your homework you can find lots of payday loan comapnies that offer the first loan free. (an example of one here).

Master01, she is mis-using the loan, the entire point is to tie you over to your next paycheck, Not hold it out for 1/2 a year.

For 80% of the US population that lives pay-check to pay-check these loans are useful for paying emergencies

[bluskygirl]

Originally Posted by Addict

Well, then I really don't see the purpose of these loans.

It's simple. The purpose of those loans is for the loan company to make a ton of money off someone who hasn't read the fine-print, or who has no other option. Not everyone has a credit card, so when someone has no other choice, they go to a pay day loan place and they either don't read or have to accept the poor deal they're getting because they need the money... or they think they do. It works great for the company- not so great for the customer.

[maken]

rather than those payday loans, why not try and get an overdraft from your bank.