Payday Loans – Worth the Risk?
I was mentioned at DCR recently regarding Website Rankings. Apparently you can get your website ranked now – which is great, however, when you post the ranking to your site, an ad is put in the bottom of the ranking banner. This particular ad was to get a payday loan.
I’ve never posted about payday loans before so I figured now was as good a time as any, right?
Here’s what I think about Payday Loans. I think they prey on a weak industry, they prey on people who are looking to keep themselves out of a big bind, however the interest that they charge is pretty hard to swallow, and in and of itself can create a larger problem.
Most of them charge you a certain amount per $100 that you borrow. This fee can range anywhere from $10 – 25 depending on the agency that you use. Those that live paycheck to paycheck can’t afford to lose that kind of money, every dollar counts!
What you have to ask yourself is whether it’s worth it to you or not. If you’re trying to keep your car from being repossessed and this is the only option you have – keep the car and do what you must!
But if you just don’t want to wait until payday Friday to go shopping because there’s a great sale at the mall, DON’T DO IT! I would only recommend using this as an option if you have no other option and a vital piece of your life or functionality is going to be stopped.
Believe me when I say you’d rather borrow from family and pay 6% interest back to them than pay a Payday Loan company, they have you write a postdated check to them and they cash it on the day that your loan matures, which is usually a two week time period. Consider this for a moment..
They have a copy of your checking account information, routing number, checking account number, your home number and address and phone number and your social security number. That is a lot of information that can cause irreparable damage to your credit if it falls into the wrong hands.
I have personal experience with these types of loans, and can tell you this much, unless you manage them very VERY VERY carefully and only take one out because of an emergency – you are doomed to fail and create a bigger mess than you had before.
What I recommend instead is to call the company that you are needing to take a loan out to pay, tell them your situation – DO NOT BE PRIDEFUL. You can even go so far as to use tears to get them to extend the date until you actually have the money. Like I said, pride is not necessary here.
It is only a desperate situation that should make you consider taking out a Payday loan, but in that desperation you should also be able to call the company you owe and request an extension to the bill you need to pay.
If they won’t budge, ask what the consequences will be, if you can live with them – DO. If you can’t live with them, call someone in your family to borrow the money, give them a postdated check and add interest. Your family member will see that you are being honest and really need it and you are making sure that it’s worth their while and you’re getting what you need without some strangers having your personal information.
I know it’s harder to owe family than a stranger – which was what drove my previous experience with a payday loan – but family will only give you what you need and it stops there. A payday loan company will keep issuing loans as long as you continue to pay them, but consider the interest you’re losing. That adds up very VERY quickly.
I would err on the side of a NO GO on the payday loans. I’ve experienced it for all of you – DON’T DO IT, IT’S NOT WORTH IT.
Tomorrow I’ll talk about all these Cash for Title places that are popping up…
Have a great Monday everyone!
