Beware Of Quick Payday Loans!

Have you seen the commercials for quick payday loans? Happy young professionals appearing to regularily visit the corner payday loan shop much like they would visit a bank for a solution to their lack of funds. Could payday loans be the answer for those with low bank accounts? Is there any harm in using these services? Aren't they better than using credit cards or going hungry?

Why Use a Quick Payday Loan?

You might reason that paying a bill with borrowed money is better than receiving a negative mark on your credit score for not paying the bill. However, some lenders are willing to make the occasional exception if you contact them about your situation. The lender may charge a small fee and not make a report to the credit bureaus.

The big question is: Should you use quick payday loans for groceries or to buy other items? Consider the true cost before making a decision. Compare the cost of taking a cash advance from your credit card against the cost of taking a cash advance loan. Very often, those who are forced to use payday loans are not able to repay the loan by the next pay check and that leads to a cycle of debt and stress. If you can not pay for groceries, can family help?

What Is The True Cost of These Quick Payday Loans?

A consumer report by the FTC (Federal Trade Commission) and the CFA (Consumer Federation of America) state that usual APR (the actual annual percentage rate you are being charged) is between 350 - 650% with some as high as 780%. So a loan of $100 can cost between $15 - $30. If you don't repay the loan by the pay date, it can be renewed with yet another fee due at each renewal. A $100 loan can cost $60 to $90 in fees alone after 3 renewals.

Before you consider taking out a 'payday cash loan', watch this video! ... A Payday Lender shares the secrets behind quick payday loans.

Based on the warnings from the federal and consumer organizations, it is clear that using pay day loans or cash advances from these businesses can often lead to more debt and serious problems. It has been reported that some companies both online and off, automatically roll over the loan and only withdraw the renewal fee on the pay date. Other sites surveyed by the Consumer Federation of America required customers to agree (in a contract) to not participate in class action suits or to file for bankruptcy.

We recommend various solutions for debt problems and credit issues throughout this site, but in all good conscience cannot recommend any companies for quick payday loans.

If you are having debt problems we suggest you seek no-cost or low-cost credit counseling. These organizations can help with reducing current interest charges and lowering monthly payments. If your problem is budgeting, you should look to an online personal budgeting system or a financial advisor who can help you to manage the money you do have and avoid using excess credit.

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For Credit Card Debt Elimination, You Can Use A Debt Reduction/Negotiation

It is a good option to use a debt reduction or debt elimination company to eliminate your credit card debt.

The methods that these companies uses provides you with greater savings than traditional non profit debt consolidation programs. This is because instead of negotiating only interest rates, the company negotiates reductions in the balances owed. It is not uncommon for small businesses or consumers to save 50 to 70% on their debts. And, most people who enter this program are free from their debts within a relatively short period of time.

If you feel that this program may help you, we recommend that you get a free and expert debt elimination plan.

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