Short-Term Payday Loans: Use Them Responsibly

We have all heard the saying “Drink Responsibly.” That is good advice, but when it comes to the particular subject of Payday Loans there is another saying that is excellent advice. “Use Payday Loans Responsibly” is by far the best statement anyone can make about these types of loans.

It is far too easy for people to get wrapped up in the idea of getting their paycheck early. Sometimes, especially in today’s economy, we may have no other choice. Getting a payday loan should be your last resort and not something to “always fall back on.”

Payday loans work like this:

You visit the lender with usually your check stub and checking account information including your checkbook. The process is very simple and is easy to take advantage of time and again. You tell them how much you need, fill out the paper work agreeing to their fee, which is usually a percentage of what you are asking for and the payback date.

You give them a check from your checking account posted dated for the date that you agree to pay them back. The check will be written for the total amount borrowed and the total fees. The particular payday loan facility that I visited did not cash the check. I was expected to report back to them on the day the loan was made with cash in hand, paying for the loan and the fees. I was then given the check back.

This was a great opportunity for me at the time. I have not used it since. The fee was not great but it was still a fee and more than I could really afford at the time. Still I had no regrets at the time because I made the decision that it would be a one shot deal. Even though the fee was not too bad to pay because at the time I needed the money, this practice can be dangerous if depended upon on a regular basis.

If something were to happen and you did not show up on time (yes, they choose the time as well as the day) to pay the loan you will be charged more fees daily for every day that you are late. I am sure one can only imagine how people can get themselves in a world of trouble and how their debt can mount higher and higher by not paying these back on the day and at the time you agreed to.

I think what made me focused on paying it back on time is the fact that I had to sign that paperwork which constituted a contract between me and the lender. I knew that if I defaulted on that particular loan my credit rating would be seriously damaged and that I would continue on a downward spiral of debt that would be incredibly difficult to get out of.

Taking care and responsible budgeting is the key to financial success. Payday loans can do harm to you if not taken seriously and if used too often. There may be times when circumstances leave us with no choice but to obtain a payday loan but it should never be a continual means to an end.