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What Might Drive You To Take Out Payday Loans?

Mar 13, 2008
Are you in a financial bind? Don't despair. There's a payday loan waiting for you. Some people think payday loans are an easy way out of a financial bind. However, there are some serious disadvantages to getting payday loans. You have to be extremely careful when making the decision to get a payday loan. So, just what might drive you to take out a payday loan? Here are some reasons. You and a lot of other people think about applying for a payday loan when:

Your back is up against a wall. If you have big bills coming and you just can't fathom how you'll pay them, but your payday is just around the corner, you might think about getting a payday loan. You just have to pay your bills. So you need to take some action.

You're credit is too bad to use other alternatives. Sure, there are credit cards, loans, and lines of credit out there for people with bills just like you. But if your credit is in a state that makes it hard for you get approved for either of these things, a payday loan just might be your best and only option.

You need money fast

Is your bill due tomorrow? You might want to do something quickly then. There's a long process to receive credit cards in the mail and to get approved for traditional bank loans. Even line of credit companies will tell you it'll take 3-5 business days before they can deposit any money into your checking account. However, payday loans are very quick.

You don't care about high interest rates

One disadvantage of payday loans is their high interest rate. Some experts say it's as high as 325 percent. That's a lot of money in interest and fees. But if you think it's more important to pay a bill on time than to pay a little extra cash for getting the loan, you might consider applying for a payday loan.

You only need a small amount of money.

Because the interest rate on payday loans is so high, it's best to use these loans when you don't need a large amount of money. Two or three hundred dollars won't hit you too bad when it comes to interest. But a one thousand dollar loan could put a huge dent in your pocket.

As you can see, there are some pretty good reasons why people apply for a payday loan. And while all of the above are reasons to do a Google search for a payday loan right this second, there are many reasons not to think about applying for a payday loan. You shouldn't think about applying for a payday loan if:

You know nothing about nor do you understand interest. If you think APR is a machine you stick a tape into, hold on. You should think twice before you apply for a payday loan. That's because many people who take out payday loans end up in a cycle of debt. And before they know it, they just don't know what to do.
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