Do I Need a Payday Loan?

Is This My Best Option?

About Payday Loan Finder
Do I Need a Payday Loan?

Before getting a payday loan or cash advance, I think it's wise to really make sure this is your best option.

Getting a payday loan can be very expensive, especially if you don't pay it off in a timely manner.

You really need to examine your finances and make sure you're going to have enough money to pay back the cash advance... along with the interest/fees.

This is where most people fall into the never-ending trap of payday loans. They borrow $500 in the heat of the moment, but don't take the time to truly assess their financial situation -- to make sure they can pay back the entire loan plus the heavy fees and interests payday loan sites often charge.

Why Do Payday Loan Sites Charge So Much?

The reason is quite simple, really: they're taking a huge chance on you. If you went to a bank to get a loan, the bank would assess your credit, and try to determine if you'll be able to actually pay back the loan. They want "low risk" people to lend to. This makes perfect sense, they want to ensure they get their money back.

With a payday loan or cash advance company, they also want to ensure they get their money back. The difference is, they're willing to lend to "high risk" people (like you and me!). People that may have bad credit, or no credit at all. People that don't have or don't want to FAX and submit stacks of paper work. People that just need to fix a short-term cash-flow problem.

That's why payday loan sites tend to charge far more in interest and fees than a bank would. The payday loan company is taking a risk on lending you their money, so they need to make the return on their investment is worth the risk.

Of course there is another reason why payday loan and cash advance companies charge so much: they know you may be in a desperate situation, and they simply want to take advantage of that. Let's be honest.

But if you're truly in need of some quick cash (for rent, bills, car repairs, or emergencies), most of us are willing to pay for the speed and convenience of a payday loan.

Think about it, with just a few minutes online from the comfort of your home, you can get a few hundred dollars deposited directly to your bank account within 24 hours. That's pretty amazing!

And you don't have to go to the bank to cash a check. You don't have to dress up and try to impress the bank loan agent. And you don't have to explain what you need the loan for. Technology certainly can work in our favor.

When Is a Payday Loan Right For Me?

Before you get a payday loan or cash advance online, here are some alternatives to consider:
  1. Sell or pawn something -- You've probably got some old stuff laying around that has some value. Even if it's just a little bit, that little bit adds up. Here are some things I've sold or pawned in the past, plus a few more to think about: books, CDs, DVDs, musical instruments, blood, plasma, clothes, computer hardware, software, or exercise equipment. You can get a few bucks from any of these things at your pawn shop, alternative clothing store, used music and video store, or even eBay. Get creative, and don't be ashamed. It's just stuff. You can get more later.
  2. Use a credit card -- Even though credit cards will put you further in debt, most people have a credit card that has a lower interest rate than a payday loan does. Plus, you can pay off a credit card in smaller installments if you need to.
  3. Ask a friend or relative for a loan -- This may seem like a no-brainer, but people tend to be embarrassed about asking for a loan. Don't be. Everybody needs a little help now and then, even the high-rollers. Most needed loans at some point to get where they are today. Plus, you'd be surprised how understanding family and can be during a financial crisis. Chances are, they've been there too and know what it's like.
  4. Use government assistance -- There are plenty of government programs for long-term and short-term relief. This doesn't always mean welfare. Do some research, and you may find something that suites your needs.
  5. Extend your due dates -- ask your debtors if they can extend their due dates, and/or lower your interest/penalty rates. These days, most debtors will work with you so you can pay off your debts more easily. You just have to ask and be persistent.
  6. Ask your employer for a payday advance -- Some employers are willing to help you out. This is essentially the same as a payday loan, but without the heavy interest fees.
  7. Get a side job -- I got a night job as a pizza delivery guy one time when I needed some fast cash. You get tips every night plus a decent paycheck that can really help out. Or try putting in some extra hours at work. It all adds up.
  8. Check with your bank or credit union -- I know a bank or credit union is probably the last place you want to go for a loan, but just give them a call. Some have automated loan applications that you can do over the phone. You can find out quickly if you even qualify for a loan.
Remember, payday loans should be your last option during a financial crisis. They're costly, and you can easily fall into the trap of paying off one payday loan with another. Don't let this happen to you.

But if you do need a payday loan or cash advance, be prepared for it. Really examine your financial situation, and plan ahead so you don't get into trouble again. And always make sure you can pay back your payday loan on time. Don't let the interest and penalty fees add up, or you'll just be in a worse place than you are now.