Should Payday Loans Be a Last Resort

By: William Brooks

Perhaps you should consider the option of a payday loan. A payday loan may also be referred to as a cash advance loan or a check advance loan. Generally it is a short term loan for a small amount (usually between $50 and $500). This option can often carry with it very high interest.

If it is true that interest is extremely high on this type of loan, why is it popular? There are a number of reasons that make it so. In many cases, the benefits far outweigh potential consequences.

First of all, there are a number of reasons people have for needing this "quick cash." Some need to make unexpected payments such as car repairs or emergency room bills. Others just find themselves overspent and lacking adequate money to purchase food, pay rent, or cover other household necessities. No matter the reason, some people just need a little extra help.

There are a number of benefits to a payday loan. First of all, most require no credit check. This makes it a much more viable option for many. Applications can often be made in the office, over the phone, or via the internet, and the process usually takes no more than twenty minutes. In most cases, the funds are deposited within 24 hours of the application. With no up front fees, it is a cost effective option. Finally, no one else is involved, so your privacy is maintained, and financial information is not shared with anyone else. Basically, funds can be obtained to cover a need and life can go on.

So where can a payday loan be found? There are an abundance of such business across the United States and the world. Most can be located in local phone books or on the Internet. These businesses are formed to cater to the working class who needs an extra boost to stretch from paycheck to paycheck.

If it is such a convenient option, why would anyone choose not to take out a payday loan? To be fair, there are disadvantages. Some believe that these businesses aim to take advantage of those in financial peril. However, businesses respond by saying that their actions are completely legal and they are helping people.

One question raised is this, what is a person is unable to pay off the loan when the next paycheck is received? Payday loans can be renewed or extended. However, there is a fee that goes along with extending these deadlines, and it can be very costly if a loan is extended over and over again.

There is controversy as to whether payday loans are beneficial or harmful. However, what they do is legal, whether totally morally acceptable or not. They do fulfill a need of many people, and whether than help is really beneficial depends on each person's individual situation. People need to review their own situations and determine what is going to work for them. Obviously the best solution is to build up an emergency fund when funds are not low, but if in a bind, a payday loan is available as a last resort.

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